Discuss the modernist characteristics of fiction with respect to Virginia Woolf's Mrs. Dolloway.

Several modernist characteristics of Mrs. Dalloway are as follows:
The novel is written in stream-of-consciousness style. This means we see the world through inside of the characters' minds. This is a subjective style, because we "hear" their random thoughts as they are thinking them, rather than as summarized by a narrator. This allows Woolf to go back and forth in time as she follows the meandering thoughts that flow through her characters as they go about their business on a single day.
Through the thoughts of shell-shocked World War I veteran, Septimus Smith, Woolf critiques modern warfare, which was common for modernist novelists questioning the carnage of the First World War. Through Septimus, she also engages a modernist theme as she questions the borderlines between sanity and insanity.
More fundamentally, like most modernists, Woolf was exploring and pushing the boundaries of what fiction was. Discussing Joyce's Ulysses in a 1919 essay, she wrote:

Examine for a moment an ordinary mind on an ordinary day’ – and ... imagine the possibility of a new fiction that comes closer to reflecting this ‘life’.

This "new fiction" is explored in Mrs. Dalloway.