Davies lashed home the matchwinning goal with just ten minutes on the clock remaining to break down a United rearguard which had remained strong throughout the course of the afternoon.
This late win is the Wanderers first maximum points in six weeks of trying and it certainly eases any recent doubts that their European hopes could be about to waver at the final hurdle.
The hosts started the game strongly and could have gone in front within the first minute when veteran Gary Speed headed wide of Paddy Kenny's goal following a deep right wing cross by Nicky Hunt.
Sheffield looked lively in the opening twenty minutes thenselves and the trickery of former Bury striker Colin Kazim-Richards was causing the Wanderers defence slight concern.
Indeed, Kazim-Richards gave the Trotters the run around on more than one occasion but the finish article could not match the build up with the youngster balooning the ball high over the crossbar of Bolton keeper Jussi Jaaskelainen.
El-Hadji Diouf was causing United full back Leigh Bromby an enormous amount of problems down the left flank and created a couple of chances which neither Kevin Nolan nor Nicolas Anelka could finish off.
Diouf himself twice went close with Kenny saving well at the near post with his legs and then tipping away a finely placed shot which seemed destined to be heading towards the top corner.
More hard to beleive for Bolton was a leathal volley from over 35 yards from full back Nicky Hunt. The former England U21 international reacted well from distance after the Blades had failed to clear their lines in defence.
Unfortunately for Hunt he found that Kenny was in inspired form as the Irish stopper tipped his thunderbolt over the crossbar and out for a Wanderers corner to deny him the chance of a first goal in three years.
Midway through the first half Bolton started to dominate proceedings but no matter how hard they tried they just could not find that all important and seemingly elusive first goal.
United still played their part in the game though, and not at any point did they look as if they where out of the contest such is the character that Neil Warnock instills in his teams.
Most of their threat was purely possessional though and it took until first half injury time for them to register their first meaningful attempt on target when much travelled winger Keith Gillespie saw his attempt deflect wide of Jaaskelainen's goal.
Within the opening twenty minutes of the second half the Wanderers had to rely on set pieces to threaten the Blades goal with both Gary Speed and Nicolas Anelka going close with free kicks.
Kenny again came to the visitors rescue by saving with his legs from Davies after a well worked Bolton move in the 58th minute and shortly after Jussi Jaaskelainen kept out hard working midfielder Nick Montgomery at the other end of the field.
Speed and Anelka then missed chances to hit the target for Wanderers after combining well with Diouf and Nolan respectively and Blades midfielder Mikele Leigertwood forced a fine save out of Jaaskelainen as the clock ticked down towards the end of the contest.
Left winger Michael Tonge hit the side netting for the Yorkshire side and it was looking as if the final ten minutes could tip either way but what happened next was to work in Bolton's favour and dent any hopes of a smash and grab victory for Sheffield.
Sheffield-born Davies finally broke the Blades resistence on 80 minutes when lashing the ball past Kenny from the edge of the area after strike partner Anelka had made an incisive run en route to goal.
Jamaican international Luton Shelton came on for Gillespie to form a three man Sheffield forward line but the hosts retained their superiority for what is a most valuable three points.
Trips to Wigan Athletic and Arsenal now follow for Bolton either side of an Easter Monday visit to the Reebok Stadium by the clubs UEFA Cup rivals and North West neighbours Everton..
Bolton Wanderers: Jussi Jaaskelainen, Nicky Hunt, Abdoulaye Meite, Tal Ben-Haim, Ricardo Gardner, Kevin Nolan, Abdoulaye Faye, Gary Speed, Nicolas Anelka, El-Hadji Diouf (Andranik Teimourian)
Subs Not Used: Stelios Giannakopoulos, David Thompson, Idan Tal, Ian Walker (GK)
Sheffield United: Paddy Kenny, Leigh Bromby, Phil Jagielka, Chris Lucketti, Matthew Kilgallon, Keith Gillespie (Luton Shelton), Mikele Leigertwood, Nick Montgomery, Michael Tonge, Colin Kazim-Richards, Christian Nade (Jonathan Stead)
Subs Not Used: Chris Morgan, Chris Armstrong, Derek Geary
Referee:
Mark Clattenburg
Attendance:
24,312
Booked:
Kevin Nolan (Bolton)
Colin Kazim-Richards (United)
Nick Montgomery (United)
Paddy Kenny (United)
Bookmark or share this story with: