We use dycal at UWashington. From what I recall, it is indicated when you want to form secondary dentin. So, that would be when you get close to the pulp, but there is still demineralized dentin. Place dycal, a temporary, and wait to see if the tooth explodes or hopefully more dentin forms. But if you do get a small mechanical exposure (slipping of the bur, not gross caries), then placing dycal would be indicated. If there is gross caries clearly in the pulp, and O&B would be indicated. I'm not looking at my textbook, so anyone feel free to pipe in. Also remember that Eugenol (found in IRM) has a therapeutic effect, which is why it is used in temporary (sedative) restorations. It will either calm down, or get really bad. Then you'll know whether it needs pulpal therapy.
This feels like a test question!