Dias is one of the highest-rated young centre-halves in European football and is reportedly being tracked by Real Madrid, Manchester United and Arsenal.
The 22-year-old Benfica player has been capped 11 times by his country and featured in their Nations League triumph last month, playing both games.
He fits the Wolves recruitment mould in being young, with potential to increase his value considerably. It's believed initial discussions have taken place between the clubs.
While many of Europe's top clubs have kept tabs on Dias, who has a £57million release clause and is contracted until 2023, Wolves would be able to offer guaranteed first-team football at a club where there are already six other Portuguese players in the squad, plus boss Nuno Espirito Santo and his coaching staff. However, Wolves will want to pay far less than the stated release clause.
The 6ft 1in player's agent is Jorge Mendes, who has close links to Wolves and has brokered a number of deals for the club in the past three years.
If Wolves were to attract the player to Molineux it would represent an audacious swoop and a real coup for a club who have already pulled off shock transfers when signing the likes of fellow Portuguese internationals Ruben Neves, Joao Moutinho and Rui Patricio.
Dias has played 69 times for Benfica after coming through the ranks with the Portuguese giants. He made his debut at the start of the 2017/18 season and has been a regular ever since, making his Portugal debut just a year after his club debut when playing against Croatia in September 2018. His form in his debut year earned him the Portuguese young player of the year award.