You enter her 1098-T in your return, and claim the tuition credit, since she is your dependent. It actually doesn't matter who paid the tuition. You could still claim the credit, even if she paid it.
The 1098-T is only an informational document. The numbers on it are not required to be entered onto your (or your student's) tax return. However receipt of a 1098-T frequently means you are either eligible for a tuition credit or possibly your student has taxable scholarship income. It needed, the 1098-T could go on both returns
