Contact your local State Police Post immediately.

Keep copies of all emails in a SAVED folder, and print them out.
As this case involves minors, I would take a set of printouts to the State Police Post. You can also save the files to an external hard drive or (flash drive?)

If it's on FaceBook, screen capture and paste into MS Word.

You can report him:
abuse@facebook.com
abuse@aol.com

Look down, and you'll see I've kept a log on a situation I had with a former friend, right down to the exact wording of the warning email sent to him.

Since your case involves two minors....I would guess the police would handle the warning to the other kid.

In the meantime, put parental controls on your daughters computer and monitor who is allowed to contact her via email or telephone. Now might also be a good time to have "the talk" about sex; and also talk to her about her other friends, why she wanted this kind of a loser as a friend.

I'm an adult, and have people contacting me on FB all the time with the words "Cyber sex". They get deleted immediately.

You may want to show her cases like Joran van der Sloot, so she can see what kind of creeps are out in the real world.

No offense, but your daughter sounds very trusting, very naive. You're going to have to find a way to make her see the real world, in a subtle way.