How can DPS use Managed Identity to authenticate access to my Azure Function?

To authenticate access to the Azure Function from Azure DPS using a managed identity.

• Enable Managed Identity for the Azure Function

JWT token for a user in Azure AD

• Grant access to the Azure Function
  In Azure go to the resource of storage account that the Azure Function needs to access.

Choose Access control (IAM)" settings and add a new role assignment.

Select the appropriate role based on the required permissions for the Azure Function.
In the "Assign access to" field.

• Modify your Azure Function to validate the managed identity.

In C# code, you can access the identity token from the request headers.
Validate the identity token using the Azure AD token validation endpoint or by using the appropriate library for token validation.

[FunctionName("Function1")]
        public static async Task<IActionResult> Run(
            [HttpTrigger(AuthorizationLevel.Function, "get", "post", Route = null)] HttpRequest req,
            ILogger log)
        {
            var identity_Token = req.Headers["X-MS-TOKEN-AADIDTOKEN"]; 
            var validation_Params = new TokenValidationParameters
            {
                ValidateIssuer = true,
                ValidIssuer = "https://login.microsoftonline.com/{TenantId}/v2.0", 
                ValidateAudience = true,
                ValidAudience = "Azure fun Client App ID"
            };

            var tokenHandler = new JwtSecurityTokenHandler();
            try
            {
                var res_principal = tokenHandler.ValidateToken(identity_Token, validation_Params, out _);
                return new  OkObjectResult(res_principal);
            }
            catch (Exception ex)
            {
                log.LogError(ex, "Token validation failed");
                return new UnauthorizedResult();
            }
        }

For more information refer to the MSDoc1 and MSDoc2.