Negan doesn't want to break Daryl. He wants to hurt him. Or he's "taken a shine" to the guy, which may actually be worse. At the end of the episode, we learn that our newest big bad has big plans for one of our oldest heroes -- namely, making him one of his top lieutenants. He's promised Daryl not only an end to the unendurable abuse, but a windfall of comfort and luxury going forward, from warm beds to hot meals and all the little extras we've seen Negan's other closest advisers enjoy. All he has to do is take a knee. He has to give up his identity and swear allegiance to a monster. He has to become another Negan.
But he declines. Daryl is way too strong-willed to be pressured into something he doesn't want to do, and after all the pain he's seen Negan inflict -- and Daryl's seen more than anyone -- there's no way he's going to work for the guy. He's a man who, no matter what, can't be broken.
For Negan, of course, that's precisely the appeal: In Daryl he sees all the strength and conviction he's maybe lacking otherwise in his team, and he knows that he if can charm him onto his side, his empire will be all the more unstoppable. But he also knows there's a limit. Daryl's refusal to submit may be a virtue, but it's not a virtue Negan can do much with if it doesn't have a breaking point somewhere. There's no way a leader like Negan can be expected to tolerate this kind of refusal for more than a little while. He'll need to settle the question of Daryl soon, either by finding another way to persuade him or by (regretfully) killing him off.