V., people who are dyslexic do not have the "wiring" to process words in the little pieces called phonemes, which everyone else can process.
http://en.wikipedia.org/wiki/Phoneme
LD Online http://www.ldonline.org recommends information from Reading Rockets site, and this page seems to be very useful.
http://www.readingrockets.org/helping
There is a lot more out there for children with dyslexia now than when my son was in school, so I hope your daughter can be successful.
You did not mention if this is a public school, but if it is, they are required by Federal law to provide an appropriate education for your daughter. Most parents find they have to intensively advocate for their disabled children, sad to say. For great web site which can help you know what your daughter's rights are and a place to learn effective advocacy stragegies which will preserve the home/school relationship, check this out:
http://www.wrightslaw.com/
The people are located in VA, but they hold seminars all over the US.
If your daughter is not in a public school, then you may not get any help from the school because they are not mandated to provide for her needs.
If you need tips on how to advocate, please feel free to email me, I know how hard it is and I was very successful. But if a child does not get intervention before the 3rd grade or is still very far behind in their reading at that time, then they probably will never read at their grade level. That is the result of scientific studies, and is well excepted as facual. They will catch up to an extent over time, but they will always be behind while they are in school.