The Oakwell outfit are stepping up their efforts in the transfer market as they prepare for a new campaign in League One.
Cardiff City man Watters spent the second half of the season on loan at Barnsley and he is now set to return to the club.
Barnsley are close to signing Watters, while former Chesterfield Town and Solihull Moors attacker Dallas is also set to arrive.
But Barnsley will not stop at the double addition and are also hunting Forest Green Rovers’ Corey O’Keeffe.
The versatile Irishman, who can operate both at full-back and in midfield, is a player that Barnsley want to bring in.
O’Keeffe joined Forest Green Rovers from Rochdale last year, but was unable to help the New Lawn outfit to avoid relegation back to League Two.
Barnsley are now close to agreeing a deal with Forest Green Rovers for O’Keeffe and offering him a quick route back to the third tier.