Bear with me for a moment...Dug up this great article I read last year about team use of defensive formations. It's worth a look to get a statistical view of the Texans' use of defensive players. Texans don't use a nickel much (2% of defensive snaps in 2011, Phillips' first season with the Texans). In fact they were in the dime almost 40% of the time in 2011. Haven't seen stats for 2012, but I believe they would show the same trend. https://www.profootballfocus.com/blo...%80%93-part-1/
On passing downs they brought in McCain as the third corner and Demps as the third safety, then brought Quin down into what would be the WILB spot in a nickel 2-4-5, using him as a small linebacker, but in a dime package. So it's kind of a nickel, sort of a dime.
In 2011 when they switched to the 3-4, their options at WILB were Ryans, Cushing or Sharpton, none of whom could be considered great in coverage, although Cushing has progressed a great deal since. Increasing use of big tight ends as receivers across the middle of the field is forcing defensive coordinators to look for bigger defenders to cover them. Phillips solution was to use Quin in this nickel-dime hybrid. It worked well in 2011, but then not so well in 2012 as Cushing and Sharpton both spent most of the season on injured reserve. The only players they had on the roster at ILB were run-stoppers, James, Sharpton, Dobbins, Ruud, Alexander. Not a good coverage man in the bunch.
Now Ed Reed has replaced Quin. Reed's not suited for run support or taking on tight-ends in man coverage. His tackling skills are not what they once were, the nerve-impingement issue with his neck, etc. He is suited to play ball-hawk deep in center-field, so Phillips must have a plan to balance his defense. Another safety is probably in the works. I read speculation they might draft at corner instead and move Harris to safety. They could re-sign Demps.
Brooks Reed could be moved to WILB in the base 3-4, but I think would rotate back outside on passing downs. He's a converted 4-3 DE who made an acceptable, not great, transition to 3-4 SOLB. I think it's a bit much to ask him to cover tight ends in the nickel. Moving Brooks Reed would also mean drafting or signing a starting SOLB for the base 3-4 package, assuming Mercilus become the starter at WOLB. Remember then that the defense is in the dime forty percent of the time and then you have either Reed or the new starting SOLB on the bench on passing downs.
If Phillips has indeed been using the dime in preference to the nickel for the last two seasons because he didn't have a viable WILB, then drafting/developing a WILB with cover skills would allow him to use a nickel 2-4-5 instead of falling straight to the dime. Going into the 2013 draft the biggest hole in the defense is at WILB.