I wouldn't use the shampoo on him unless you are 100% certain, it is actually a pesticide. I'm a school nurse, and often parents freak out and use it over and over on the kids not realizing how toxic it is and the kids get a red, irritated, swollen scalp. You would have to have a live bug to lay the nits, so if you haven't seen any walking around, and what you are seeing is easily removed, it's probably dandruff. Any way you can post a pic?
Unless your DS wants to have a shaved head, please do not shave his head. That is really an over reaction, again, unless your DS likes that look and wants to try it anyway. Another school nurse story, one family shaved their daughter's hair, yes daughter, and she had long beautiful black hair. She had to wear a scarf wrap the rest of the year like the cancer kids wear. Such an over reaction!