Step 1: Rearrange terms.
\[
\frac{dy}{dx} = \frac{1 + y^2}{\tan^{-1} y - x}
\]
Using substitution \( v = \tan^{-1} y \Rightarrow dv = \frac{dy}{1 + y^2} \),
\[
\frac{dv}{dx} = \frac{1}{v - x}
\]
Step 2: Solve using integration.
\[
\int \frac{dv}{v - x} = \int dx
\]
\[
\ln |v - x| = x + C
\]
Replacing \( v = \tan^{-1} y \),
\[
\ln |\tan^{-1} y - x| = x + C
\]