Unlike many other villains in Angel, Holtz was a force for good as he killed vampires. He became an antivillain after making a deal with a demon to help Holtz get revenge on Angel in the future. He is the main antagonist of the third season.
Holtz lived in England in the late 1700s with his family and was a very skilled vampire hunter having killed over 300 of them. Darla and Angelus murdered his wife and son. They turned his daughter into a vampire forcing Holtz to kill her. Holtz managed to confront Angelus several times and torture him but he managed to escape each time. Daniel lived in isolation until he met the demon Sahjaan. Sahjaan put him into suspended animation. Holtz awakened in the year 2001 with Sahjaan briefing him on Los Anegles. Sahjaan provided him with demons but Holtz preferred people similar to himself. He killed the demons and recruited a group of like-minded people.
Holtz discovered Angel had a soul and his son Connor. He planned to abduct the son and with one of his followers they would raise him as their own to make Angel feel pain. This failed when the Sahjaan showed up opening a portal to a hell dimension. Holtz jumped in with Connor raising him as his son and teaching him to slay vampires and demons.
Connor and Holtz returned as a teenager and old man respectively. Daniel urged Connor to return to his father having claimed to forgive Angel. However, in the last part of his plan he had his follower kill him framing Angel in the process to turn Connor against Angel. Connor buried Angel in the ocean as an act of revenge because of Holtz's plan. Angel was later dug up by Wesley. Before Holtz died, he knew how far he's fallen when he told his follower who hesitated to kill him "I'm not asking you to follow me to Hell, just to send me there."
Connor speaks of Holtz being a good man when Angel had become Angelus as part of Jasmine's plan and insulted him. He also mentions learning many skills from his adoptive father at one point.