。
She is proud of her daughter.
Literal
She [topic-は] daughter [object-を] pride [to-に] is-doing.
娘を自慢にしている — 自慢にする means 'to take pride in, to be proud of.' 自慢 takes を for the object of pride when using する. に marks it as a suru-verb complement.
。
She is proud of her daughter.