Extreme character converting daughter to new form of Buddhism (3)
I believe the answer is:
zen
'form of buddhism' is the definition.
(I've seen this before)
'extreme character converting daughter' is the wordplay.
'extreme' means to remove the middle letters.
'character' becomes 'zee' (zee is a kind of character).
'converting daughter' becomes 'n' (I am not sure about this - if you are sure you should give a lot more credence to this answer).
'zee' with its middle taken out is 'ze'.
'ze'+'n'='ZEN'
'to new' acts as a link.
I am not very happy about this link. Some or all of it may be part of another bit of the clue.
(Other definitions for zen that I've seen before include "Form of Buddhism emphasising meditation and intuition" , "School of Buddhism" , "Japanese Buddhism" , "Branch of Buddhism" , "Dibdin detective; Jap. Buddhism" .)