The right-back, who turned 18 in March, is yet to make his debut with the Porto first team but is already considered one of the next big things from Portuguese football.
Two months ago Spanish publication AS reported Barcelona and Real Madrid were fighting to lure him to their academies as a prospect for the future.
Earlier this week it emerged Real Madrid are set to beat their rivals for the signings of two other youngsters in the shape of 19-year-old Theo Hernandez and Brazilian teenager Vinicius de Oliveira Junior.
The Champions League holders are trying to extend their current dominance of European football with a new transfer policy that has also seen the likes of Marco Asensio and Martin Odegaard move to the Santiago Bernabeu in recent times.
However, in March AS claimed Barcelona were in pole position to win the race for Dalot, having launched a €10m (£8.4m, $10.9m) bid to prise him away from Porto. The Spanish publication claimed the Portuguese side turned down that offer but the Catalans were expected to make a second bid closer to his €20m release clause in order to beat Real Madrid.
There have been no further updates since, but Dalot has now admitted to being flattered by those links.
"I do not want to be think about it but being watched by Real Madrid and Barcelona is a pride and gives me motivation" Dalot admitted during an interview with Record. "[Training with the Porto first-team] made me grow because that's the top and is where I want to be."
Dalot attracted the attention of the La Liga giants last year when he helped his country conquer the European Under-17 Championships, beating Spain on penalties in the final.
The versatile full-back has keep developing during the current season and recently was nominated for Tuttosport's Golden Boy award alongside the likes of other football starlets such as Monaco sensation Kylian Mbappe and Milan keeper Gianluigi Donnarumma.
Dalot's compatriot Renato Sanches won the award last year and the Porto starlet is also delighted to be on the shortlist this time.
"It makes me very proud. Above all, it is the recognition of my work and that motivates me to keep going. I've had a great year in which I've achieved a lot of beautiful things, but I want more."