Davies told BBC Radio Nottingham: "We're still making up for our inactivity in the January transfer window last season and I think we're still only three-quarters of the way through with regards to our defensive situation.
"Added to that is that we have found James will be missing for three months with a stress fracture so we still have a bit to do yet."
Davies has made a total of nine signings in the close season but has missed out on several defensive targets including Shaun Barker and Matthew Mills.
Forest begin their Championship campaign away against Reading on Saturday, 8 August.
You can hear full commentary on Saturday's match on BBC Radio Nottingham from 1330 BST on 103.8FM and 1584AM.
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