It's not really reported speech. Example of reported speech:
"What time is it?"
He asked me what time is was.
Your example:"He had never danced before"
is the past perfect tense in English. It relates two things that happened in the past.
"He was awkward on the dancefloor because he had never danced before."
"He had never danced before" can't stand on its own without some contrast with something else that happened.
Hope this helps. This is my favorite subject
