I think Bianchigirl is referring to real Horizontal dropouts aka Track Dropouts.

On the Semi-Horizontal drops on your crosscheck you'll want to pull the rear wheel as far rearwards as possible. If the derailleur is rubbing on the largest cog, and you've tried all the adjustments it usually means you are trying to use a larger cog than the derailleur is capable of handling.

like Bianchigirl asked: Whats the size of the big cog, and what Rear Derailleur are we talking about?