McDermott grew up in Cascade, Iowa, and played basketball for Cascade High School. A 6'8" center, he then played college basketball for the Northern Iowa Panthers from 1984 to 1988. In 1988, he earned a B.A. degree from Northern Iowa.
McDermott began his coaching career as an assistant coach at North Dakota between 1989 and 1994, and during his tenure helped lead the Fighting Sioux to five consecutive NCAA Division II tournaments. On March 29, 1994, he accepted his first head coaching position at Division II Wayne State College. McDermott remained as the head coach at Wayne State College for six seasons and compiled an overall record of 116 wins and 53 losses (116–53) during his tenure there from 1994 to 2000.
In April 2000, McDermott resigned his Wayne State post and accepted the head coaching position at North Dakota State. In his lone season with the State, he led the Bison to an overall record of 15 wins and 11 losses (15–11) en route to an eighth place finish in the North Central Conference.
On April 3, 2001, McDermott was introduced as the new head coach at his alma mater, Northern Iowa.
McDermott remained as the Panthers' head coach for five season between 2001 and 2006. During his tenure he led Northern Iowa to an overall record of 90 wins and 63 losses (90–63), the 2004 Missouri Valley Conference tournament championship, and to appearances in the 2004, 2005, and 2006 NCAA Tournaments.
McDermott resigned his position with Northern Iowa on March 21, 2006, and accepted the same one at Iowa State. McDermott was the Cyclones' head coach for four seasons between 2007 and 2010, and during his tenure led them to an overall record of 59 wins and 68 losses (59–68). His marquee victory at Iowa State came on March 6, 2010, against No. 5 Kansas State. This was his only victory over a ranked team while with the Cyclones.
On April 26, 2010, he resigned from Iowa State and accepted the same position at Creighton. The contract with Creighton was a reported ten-year deal, worth well over one million dollars per season.
In his first season with the Bluejays, McDermott led the team to the finals of the CBI where they lost to Oregon.
In just his second year McDermott led Creighton to the MVC conference tournament championship, were ranked as high as No. 12 in the nation, finished sixth nationally in home attendance, and a No. 8 seed in the NCAA Tournament. Creighton would defeat Alabama in the second round and lose to UNC in the third round.
Entering the 2012-13 season, McDermott had Creighton in the rankings in both preseason polls. They were No. 15 in the USA Today Coaches Poll and No. 16 in the AP Poll. McDermott would lead Creighton to the MVC regular season championship, its second straight MVC conference tournament championship, were ranked as high as No. 10 in the nation, finished sixth nationally in home attendance for the second consecutive year, and a No. 7 seed in the NCAA Tournament. Creighton would defeat Cincinnati in the second round and lose to Duke in the third round.
After the end of the 2012-13 season, Creighton left the Missouri Valley to join the Big East. In his fourth year at Creighton and first in the Big East, McDermott would lead Creighton to a runner-up finish in the Big East regular season and tournament, were ranked as high as No. 9 in the nation, finished sixth nationally in home attendance for the third consecutive year, and a No. 3 seed in the NCAA Tournament, the highest seed in Creighton history. Creighton would defeat UL Lafayette in the round of 64 and lose to Baylor in the round of 32.
Despite being ranked No. 23 during the season, McDermott would have his first losing season at Creighton as they finished in a tie for last place in the Big East with a record of 14–19.
In his sixth season with Creighton, McDermott led the Bluejays to a sixth place finish in the Big East and the quarterfinals of the NIT where they lost to BYU.
Entering the 2016-17 season, Creighton was ranked in both preseason polls. McDermott led the Bluejays to an 18-1 start and a ranking as high as No. 7 in the nation. The team ultimately finished 25–10, losing to Villanova in the Big East tournament finals, and to Rhode Island in the first round of the 2017 NCAA tournament.