10 gal sump and fuge for a 10 gal dt

If they are sitting side by side (on the same level) and the water level is the same in both tanks, there will be no siphoning action. If there's a pump in the sump that's moving water from the sump to the display tank, your plan for drilling will act just like a regular drain, but it's technically not siphoning water from the one to the other. It'll be important to make sure that the pump moving the water from the sump to the display is not too large for the diameter of the drain, in order to keep from moving water from the sump to the display faster than it can drain back to the sump.

Yep, it'll work, as long as the drain is properly sized. A 1" drain is rated for roughly 600 gph. I don't know about the ratings for 3/4" or 1/2" drains, but surely someone else on the forum does. While it's always good to have a slightly larger than required drain, a 1" bulkhead will seem quite large in a 10g tank, so I'd go with a smaller one if you find that you're able to.