But Reading, fresh from their FA Cup exploits at Liverpool, bounced back in the second half and but for the heroics of Forest keeper Lee Camp could easily have taken at least a point.
Davies said: "We could have had four or five goals in the first half but only scored twice and that gave Reading the opportunity to come back at us.
"It was a potential trapdoor for us playing against a side in a totally false position and they nearly made us pay in the second half.
"If we had scored a third goal - as we should - it would have been a totally different type of game in the second half and it's a lesson for us to learn.
"We've 20 games left to play and this very good young side we have here has got to show they are capable of playing under the pressure of being a top-eight side."
Forest got the perfect start as they went in search of their fifth successive home win, Chris Cohen picking out Paul Anderson for an open goal in the 10th minute.
Reading contributed to the breakthrough themselves with some inept defending on the halfway line but the second Forest goal owed everything to their creativity.
Cohen did the spadework and Polish star Raddy Majewski cleverly put Robert Earnshaw in for his eighth goal in 11 starts this season.
After half-time it became a contest between Reading's Icelandic striker Gunnar Thorvaldsson and Forest keeper Camp, who twice produced fine saves to keep out goal-bound headers from the visitors' new recruit.
Camp got his body in the way of his first attempt in the 56th minute but his second save a minute later rekindled memories of Gordon Banks' memorable World Cup stop from Pele.
Just to add to Reading's misery Camp went on to save a 69th-minute penalty from Reading substitute Brian Howard after Jimmy Kebe had been brought down by former Reading full-back Nicky Shorey, who was red-carded.
Reading finally broke through in the last minute when Kebe headed past Camp from one of many menacing crosses by Ryan Bertrand.
Reading caretaker boss Brian McDermott said: "We were very disappointed with our first-half performance but we were much better in the second and I thought we should have got something from the game.
"The Forest keeper was the man of the match and if we had scored 10 minutes earlier than we did, we would have got some reward. But you have to give credit to their keeper - he was excellent.
"I was disappointed for Thorvaldsson that he didn't get himself a goal. He got stronger as the game went on and he showed his pace but he won't always be that unlucky in front of goal.
"But we nearly got something against a very strong and talented team who have a really good chance of going up this season."
Source: Team Talk