Prosecutors say the 24-year-old Brace offered to give his daughter to a maintenance man at a gas station last month in exchange for "two 40s" -- slang for crack cocaine, not 40-ounce bottles of beer as was previously reported.
Brace's attorney dismissed the charges as "totally trumped up allegations," saying prosecutors have no proof to support them.
A judge released Brace on $10,000 bail, ordering him to stay away from his daughter and remain drug and alcohol free.
The child is in state custody.