My goal is I wish to configure dietpi on first boot with my SSH key and other settings so that I do not have to manually do this on multiple VPS. Second quesiton, is it possible for dietpi data partition to be btrfs so I can use btrfs-send remotely for backups?
After the dietpi-installer has run it ends in the shell.
Before booting the system you can edit dietpi.txt (nano /boot/dietpi.txt) to set up the automated boot options.
This is how I have my system set up, I have currently a separate ssd with btrfs for the data partition but I think at one point I had formated a partition on the eMMC.