Ancestry Visa to ILR with 1 dependant

[Maijo]

Hi

I am on a 5yrs ancestry visa with I had it extended over a year ago from the original 4yrs visa. I have a 4 yr old daughter (born in the UK in 2006) whom I had the 5 year visa stamped on her passport as my dependant when I was getting mine extended. I am now qualified to apply for ILR after completing the 5 yr total stay in the UK and I want to find out

1) Do I need to apply for her as my dependant as well? OR

2) Can I just apply for me and then apply for a British passport after I have obtained my ILR.

Please advise me what the right thing to do is?

Regards,