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The former Spurs coach is on their radar
Pep Gaurdiola's long-term future at the Etihad is in some doubt with the Spaniard yet to commit beyond next season.
The former Red Devil has called on the club to spend over the off-season on players like Sancho to ensure they start winning silverware again.
Arsenal have agreed to terms over a new contract for Pierre-Emerick Aubameyang, according to the Telegraph.
The Gunners have been locked in talks with their star striker for some time but appear to have finally convinced him to re-sign.
While official confirmation is expected on Monday, the Spanish outlet reports that club president Josep Maria Bartomeu has told them "Setien is out".
The Blues are eager to bring Stones in on loan from Manchester City, while Dunk is valued at £40 million (€44m/$52m) by Brighton and Chelsea will have to splash the cash to land him on a permanent deal.