David Hype Pierce.
This is really such a small thing. I doubt the studio audience could see it. But look where DHP looks when Daphne says this. And his small smile afterwards. If you don’t know this scene from “Juvenilia”: right before this moment Daphne alluded at getting a body part pierced that’s not her ears. And of course that would make someone like Niles think and IMAGINE. And that’s why this reaction is simply perfect. He constantly does these little things that add SO MUCH to his character.