Hi @Abby Greentree ,
The short answer is "no".
When you link a DPS instance to an IoT hub, you use a SAS key with a specific set of permissions. The DPS instance uses this, for example, to add device registrations to the IoT hub.
If you disable local auth in IoT Hub, you're disabling the use of shared access policies so that DPS can longer connect.
This is called out in the DPS documentation: https://learn.microsoft.com/en-us/azure/iot-dps/how-to-manage-linked-iot-hubs#limitations