The Mail reports that the Toffees have scouted the teenager extensively in recent times, but they face plenty of Premier League competition for his signature - with the Hornets and Arsenal also keeping a keen eye on the 18-year-old.
But it appears that Everton may miss out on the stopper, with the Mail adding that Watford are now in talks with Dahlberg about a potential £3.3 million deal that would see the youngster arrive during the January transfer window.
The Mail suggests that Marco Silva is hoping that Dahlberg can give Heurelho Gomes some competition as the latter approaches the twilight of his career - though he has certainly made some stunning saves during his time with the Hornets.
Everton may not be too disappointed to miss out on Dahlberg when they have Jordan Pickford looking to hold the number one spot at Goodison Park for a long time.
But they could have perhaps done with the additional depth between the sticks, so perhaps Watford edging clear in the race may be the catalyst that spurs the Toffees, or Arsenal, into following up their interest with a concrete bid, especially as £3.3 million for a player of Dahlberg's potential could prove a real bargain.