The {\bf Daon theory} is a new general theory of physics, it is a completely new way to approach physics and includes, in principle, all phenomena of nature. The theory is presented in a series of closely related papers treating Electromagnetism, Atomic physics, Relativity, Particle physics, Gravitation and Cosmology. The numerical value of the main natural constants and parameters are calculated, while the explanations for the various natural phenomena are simple and logical. All the results from this theory agree, as far as we know, with experimental data. In this part, we present some unknown forces acting within the atoms, giving the explanation to the strange behaviour of the electrons. We present a simulation program (ATOMOL) able to follow all charged particles within an atom, including their velocity, position and energy at any given moment. We explain the electron's associated wave, the fine structure constant, the constant of Planck and we explain and calculate the magnetic moment of the electron and the nucleus.