Peachtree DAC w LFD integrated ?

Since the iNova has both a "pre-out" and a "line-out", you should have no problem doing what you what to do.

The pre-out would let you use the volume control on the iNova to match levels, but the line-out will have a cleaner signal path.

Just run an pair of interconnects from either output on the iNova to any high level input on the LFD.

"Will the DAC be engaged regardless of which output is used from the Peachtree? "

Yes. You will need to choose the DAC INPUT on the Peachtree, but that will be sent to both outputs.