If you have a large enough cage, or preferably a multi-level cage like the critter 3, a nest area will be a very welcome addition for your degus. A nest area is a dark enclosed space where your degus can go when scared, tired, hot or just bored, and it mimics their natural environment of underground tunnels by having an area that is different to the rest of their cage. You can keep food, their house, their timothy hay, whatever you want really, in this area and they'll love you for adding it to the cage.
I personally made mine out of cardboard, and if you can find a cardboard box that is the same size as the cage (perhaps the box the cage came in will be a start...you can always add more cardboard to it to make it more suitable) then it'll do well. If the cardboard is on the INSIDE of the cage or accessible from the inside, they will gnaw at it. Alternatively, a couple of long planks of kiln dried pine cut to size, 10 hinges and 5 sheets of wood (any type, cut to size, they won't be able to gnaw at it so it's safe...and that's one piece for the top and 4 pieces for the 4 sides...the hinges will allow you to open all 4 sides and the top if you wish to) will provide a more permanent nest area for them and will be infinitely more comfortable.
Another reason for having a nest area and havng their house inside it is that degus are diurnal and they also react (sleep or wake) based on the sunlight. If you find your degus waking you up at 7am or whenever the sun rises where you live, a nest box will soon stop that from happening. Degus will be active both inside and outside of the nest area, but once they're in there and sleeping they'll only wake up if you wake them up (accidentally or otherwise) or once they've had enough sleep that they need to wake up.
Degus also don't like draughts, and if there's only one entrance into the nest box then this won't be a problem...as long as that entrance is there, the air will circulate and be fresh. It would however be a good idea to make sure that your degus have everything they need to survive all inside the nest box, just in case any of them decide to never venture out again...everything but an exercise wheel, of course...it's a relaxing area with their house nearby, you don't want other degus making noise in there. Also, their nest area should be considered their private space...intrude on their privacy in there as little as possible.