Memphis also dealt second-year guard Javaris Crittenton to Washington and sent a conditional second-round pick to New Orleans, while the Wizards waived guard Dee Brown.

Hornets coach Byron Scott gave James an opportunity in training camp to compete for second-string point guard, but Devin Brown emerged as Chris Paul's primary backup. James hadn't played in six games.

Daniels has averaged 5.1 points and 3.6 assists in 13 games with the Wizards. The 6-foot-4 guard was a fourth overall pick by the then-Vancouver Grizzlies in 1997 and was a member of the San Antonio Spurs' 1998-99 championship team.

Daniels "has always been a steady, proven guard in this league," Hornets coach Byron Scott said. "He has won at the highest level and is a clutch player. He also gives us a different look in the backcourt with his size."

Crittenton has appeared in seven games as a reserve for the Grizzlies, averaging 2.7 points.

Memphis, which was 6-15 heading into Wednesday night's game at Oklahoma City, is in last place in the Southwest Division and is a long-shot to make the playoffs this season in the powerful Western Conference.

The first-round pick the Grizzlies got back from Washington was initially part of the Juan Carlos Navarro deal between the teams in 2007.

"Now we possess all our future first-round picks and have complete flexibility, if needed, for future deals," Memphis general manager Chris Wallace said.

James played in eight games for New Orleans this season, averaging 2.5 points. He can play either guard position and has been a steady scorer in the past. James started 79 games for Toronto in 2005-06, averaging 20.3 points and 5.8 assists.

"This trade strengthens and energizes our backcourt by giving us a veteran guard in Mike James who can help us immediately with his stability and scoring ability and a young guard in Javaris Crittenton who can help us now and in the future with his athleticism," Wizards president Ernie Grunfeld.