Smart money is on drums, as TCS and myself both mentioned up-thread. No frame mods at all; if you get the x-rdf for thread-on freewheel, you can run from 110mm to 135mm OLD, 1 thru 7 speeds (possibly an 8 speed, but i'm not sure there's room for all that) and plays nice with vertical dropouts if you go 5+ speeds....or run a tensioner with ss.....

$85 plus a wheelbuild; i'd go 2x on a 26" wheel....