Well that's the part I was talking about drilling and tapping. Right above the rear dropouts, where fender/rack holes would normally be on other bicycles. I'm assuming they're not drilled into this frame because it's a mountain bike and was never intended for fenders/racks. This is the rack I wanted to mount onto the bicycle:

TopeakŪ Cycling Accessories ? Products - Explorer Tubular Rack (w/o Spring)

Sorry, realize this is becoming not so much about mechanical issues.