The British team suffered a major setback last month, with 'Britannia' losing each of their world series races, but Dalton remains wary.
"You just can't write them off - it wouldn't be fair, it wouldn't be right and with the talent behind that organisation, you write them off at your peril," Dalton has told The Times.
"The one thing you can never dismiss or ignore is the fact that Ben is the most decorated Olympic yachtsman in history.
"That comes with fun tickets - the guy is really good, so I just never, ever dismiss him. The guy is determined as hell."
Dalton says Ainslie is coping well with the disappointment of his team losing all their warm-up races.
"I think he's handling it really well," Dalton says. "I didn't know they are saying it's a siege mentality in their team, but that doesn't surprise me, because my philosophy with this campaign is the same."
The challenger series, which also involves Italy's Luna Rossa Prada Pirelli and NYYC American Magic,- runs from January 15-February 22.
The winners will then face defenders Team NZ from March 6.
Join us on Friday for live updates of the America's Cup challenger series.