Driver Kit Library

Can you clarify your question further? DriverKit is a framework, and therefore is already a "library" in some sense. If you're talking about making your dext a library, they you're not making a dext. In the same way that an app is not a library. You can make a standard library or framework and include that from a final dext.

I am trying to compile my driverkit source as library, and share it to another team. They will include it in their source and compile their DEXT. WIll this need any special entitlements and signing?

No. Simply compile a library and provide it to the other team.

Thanks it worked

Able to compile and run without any entitlements