Fernando Torres tapped in from a pass by the impressive Raul Meireles to put the Reds in front after 36 minutes.
Nenad Milijas had a promising effort saved for Wolves before Meireles struck a dipping 25-yard volley into the top corner of the net in the 50th minute.
Torres completed the win in the last minute with another simple finish.
Victory came in Dalglish's fourth game back in charge and will increase the feel good factor he has engendered as he tries to rescue his team's season.
The manner and style of the win will also help raise Liverpool spirits as the energy and industry of Portuguese midfielder Meireles, which was so key to the win, was matched by the rest of the side.
It earned revenge over Wolves, who had beaten a tame Liverpool 1-0 at Anfield in December by pressing their opponents and depriving them of any space or time on the ball.
The home side employed the same tenacious tactics again as they tried to stay stay shirt-tight to their visitors but, this time around, the Reds were a different proposition as they showed a greater fighting spirit combined with a more accomplished passing game.
Wolves' focus on stifling their opponents came at the cost of their own attacking play as they rarely threatened at 0-0, while the chances that did come along as the two sides wrestled for supremacy were engineered by Liverpool.
Christian Poulsen gave Wolves their first scare when, from a pull-back by fellow midfielder Lucas Leiva, he had a side-footed effort blocked by centre-back Christophe Berra, who had just come back on after having a couple of stitches put into a head wound.
The forward runs of Lucas and, in particular, Meireles from midfield were a feature of the Reds play and the latter also supplied a delightful angled pass over the top of the Wolves defence to release Torres.
The Spaniard took the ball with his first touch, cut inside defender Richard Stearman and struck an early left-footed shot, which keeper Wayne Hennessey parried away.
Torres and Stearman were involved in a running battle as a feisty affair sometimes showed signs of boiling over, while Meireles sent a 20-yard strike wide and a turn-and-shot from Maxi Rodriguez again forced Hennessey into making a save before Liverpool took the lead.
Poulsen slid a pass into the clever run of Meireles, who beat the offside trap and unselfishly slid a ball across goal for Torres to tap in. The striker picked the ball out of the net and dropped it at the feet of Stearman as he celebrated.
Wolves had to be more adventurous and, after striker Steve Fletcher had a shot comfortably saved, team-mate Milijas had an effort blocked at the far post by Pepe Reina.
Liverpool had seen leads overturned in their previous two league games but a similar occurrence seemed unlikely because, after Dirk Kuyt failed in poking the ball through Hennessey leg's when through on goal, Meireles added to his side's lead in spectacular style.
When Berra headed Daniel Agger's long free-kick out of the Wolves defence the ball fell to Meireles and he fired home with unerring precision.
Liverpool started to play on the counter attack as they edgily held on to their advantage and Jonjo Shelvey missed the chance to calm their nerves when he blazed over with just Hennessey to beat.
But, even though the Reds had not kept a clean sheet in their six previous Premier League games, they repelled their rivals and sealed the points when Torres fired into the roof of the net from close range.
http://news.bbc.co.uk/sport2/hi/football/eng_prem/9365393.stm
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