After vastly expanding and refocusing their sound with Riddles, their Dan Deacon-produced third album, Ed Schrader's Music Beat intended to make their most danceable record yet. The group wrote more disco-influenced material and premiered the songs live as they set out on a tour with Deacon in February of 2020. This quickly came to an end due to the COVID-19 lockdown, and later in the year, the group's touring drummer, Kevin O'Meara of the much-missed duo VideoHippos, was found dead after being declared missing for several weeks. The album took on a much different tone as the songwriting progressed and the tracks were recorded and mixed in Baltimore with co-producer Craig Bowen. Less synth-drenched and lushly orchestrated than Riddles, Nightclub Daydreaming is comparatively stripped down, but not in the same raw, frenzied way as their early work. It sounds closer to dark post-punk than anything else, with an element of New Romantic drama replacing the punk-blues rage of the duo's past. The lyrics are poetic depictions of late-night scenes in various European and American cities, fueled by desire and unquenchable thirst. Shortly preceding the album's release, Schrader shared a personal statement that they have always felt like a woman, and prefer to use gender-neutral pronouns. The songs allude to feelings of disconnection, hiding one's true self, and on occasion, splendor and celebration. "This Thirst" is a soaring indie rock anthem, while the driving "Echo Base" is reminiscent of goth-leaning post-punk bands like Sad Lovers & Giants. As on Riddles, the slower, less immediate songs require patience in order to appreciate, but "Black Pearl" stands out as an expression of fear and isolation, especially during its grand chorus. Nightclub Daydreaming does feel influenced by the pulse of nightlife, but its honesty and self-expression resonate louder than its rhythms.