Does the 10% damage increase from kayle's Q stack with the 20% magic damage increase from Dfg's active?

Well, it should. The on-hit magic damage from each attack should benefit from the amplification of both the item and her spell. However, I am unfamiliar with how amplification stacks. So, I don't know if you would get 30% or a smaller number.

On a related note, i never build AP on kayle either, but is a good question. Thought, the damage amplification from the DFG would make a bigger difference on your Q then your E.

yes they will stack, the 2 abilities share no common name and are separate debuffs. since they are different, they are calculated separately and thus give you 2 additional damages. but they wont stack in that the bonus from each other will effect each other. so its just additive instead of multiplicative