Steve Bruce has been the bookmakers' favourite for the past few days after the withdrawal of Alan Curbishley from the race.
But sources indicate McDermott is on the radar of Wolves owner Steve Morgan and chief executive Jez Moxey, although it is unclear whether they have yet firmed up their interest.
McDermott is on a one-year rolling contract and therefore would not cost huge amounts in compensation if Wolves decide he is the person they want to pursue to succeed McCarthy.
Brighton boss Guy Poyet has also been linked as a possible candidate, although sources close to Wolves have played down the interest in the Uruguayan.