Scans on the 23 year old's injured knee showed cruciate problems which would mean he could not pass a medical at Goodison Park before the transfer window closes.
With Davis looking at six weeks out of action Everton manager David Moyes pulled out of a £5 million deal. Reports this morning though say Boro will not pursue their interest, despite an offer being accepted by the Londoners.
This could spell problems for cash strapped neighbours Sunderland as they were expecting Fulham to buy their American international Claudio Reyna as a replacement for Davis.
Meanwhile Boro face a race against the clock to receive permission for new signings Gaizka Mendieta and Danny Mills to make their debuts at Leicester tonight.
International clearance for Mendieta had still not arrived late this morning and the Bank Holiday weekend may have held up Mills' registration.