O'Leary said: "I feel that if we've got to take this club forward we need quality to push it forward,"
"I think Dawson has good potential."
Birmingham manager Steve Bruce is more keen on Irish winger Andy Reid after scoring ten goals already this season.
Reid was also watched by Charlton boss Alan Curbishley at Watford last week where he scored Forest's last minute equaliser.
With Forest struggling in the league, Forest chairman Nigel Doughty may decide it's best to cash-in on the assets if the price is right.
It's going to be a nailbiting time throughout January for Reds fans.