Isco, 27, has been in and out of favour with Zinedine Zidane this season. According to the Daily Express, Real Madrid are looking to offload players to free up funds to sign Eriksen in January.
They are willing to let Isco leave after six and a half years at the Bernabeu, during which he has made 290 appearances and scored 48 goals. Manchester City are also reportedly interested in his services.
During his time in the Spanish capital, Isco has won La Liga, the Copa del Rey and four Champions League titles. Eriksen, meanwhile, is out of contract at the end of the season and Tottenham will be sorely tempted to move him on next month for a fee.