A circle hook works with the float rigs, but I don't like them for the dropper rig. Often times if the bait is near the bottom the sheepshead will just nip at it, and you won't feel the bite until he is leaving. With a floating bait, the sheepshead will grab the bait and swim down before swallowing it, and you can tell exactly when to start reeling to get the hook set. Fish that hit near the surface are oftentimes more aggressive than the fish staying near the pilings in deeper water, so that also helps with the circle hook. If you do use circle hooks, open them up a little bit and you will get much better hook-up rates.