Young midfielder Davies began the season in the Royals starting 11 but has since slipped down the pecking order and has not featured under Brian McDermott.
He will join Yeovil on loan, for a month, after failing to break into the Royals first team since returning from a similar spell at Wycombe.
At Huish Park he will join up with fellow Royals loanee, goalkeeper Alex McCarthy who is having a wonderful season as the Glovers number 1.
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He won’t get much football here at the minute, so this is a decent move for the lad.