I think [name]Danica[/name] or [name]Dagny[/name] would be really sweet. [name]Danica[/name] means “[name]Morning[/name] [name]Star[/name]” and [name]Dagny[/name] means “New [name]Day[/name]”. [name]Danica[/name] [name]Harmony[/name]? [name]Dagny[/name] [name]Helena[/name]?
You could also consider honoring him by the meanings of HIS names… [name]Donald[/name] (great chief; world mighty) and [name]Herbert[/name] (proud warrior, famous army):
Some of my favorites that could make that connection:
[name]Matilda[/name] ([name]Tilda[/name], [name]Tillie[/name]): Mighty in battle
[name]Eloise[/name]: Famous warrior
[name]Sloane[/name] (this seems like it would fit will with [name]Elliot[/name]!): Warrior
I’m not sure how you feel about those meanings as they are a bit fierce but I think they could work if paired with a name that has a bit of a lighter meaning. Something like…
[name]Felicity[/name]: happy
or
[name]Carys[/name]: love
That way your new little girl can be a warrior for love and happiness!
[name]Dakota[/name] means friendly
[name]Davina[/name] means little deer
[name]Darby[/name] means town of deers
[name]Dawn[/name]
Danella from [name]Daniel[/name] meaning God is my judge
[name]Dyan[/name] masculine spelling of [name]Diane[/name] meaning heavenly, divine
[name]Daphne[/name] is my fave D name for a little girl!
I love [name]Hope[/name] for a middle name-- that would be a cute link to her sister.
First name suggestions:
[name]Delaney[/name]-- means dark challenger, but I love the sound of [name]Delaney[/name] and [name]Elliott[/name] together. They really fit
[name]Dora[/name]-- means gift
[name]Diana[/name]–means divine
[name]Dorothy[/name]-- means gift of God
first suggestion would be [name]Delaney[/name] [name]Hope[/name], but maybe [name]Dora[/name] [name]Hope[/name] would be a better meaning?
[name]Honor[/name] would make an exceptional middle name here! As already suggested, [name]Hope[/name] is great too!
DH
[name]Delta[/name]
[name]Dana[/name]
[name]Dara[/name]
[name]Darcy[/name]
[name]Danica[/name]
[name]Darla[/name]
[name]Della[/name]
[name]Delphine[/name]
[name]Dahlia[/name]
[name]Delia[/name]
[name]Daphne[/name] (I love [name]Daphne[/name] [name]Hope[/name] with your daughters name)
Decca
[name]Devon[/name]
[name]Desiree[/name]
[name]Deirdre[/name]
[name]Diandra[/name]
[name]Diana[/name]
[name]Diana[/name]
[name]Hope[/name]
[name]Huxley[/name]
[name]Hadley[/name]
[name]Hailee[/name]
[name]Hayley[/name]
[name]Harriet[/name]
[name]Henrietta[/name]
[name]Hattie[/name]
[name]Helena[/name]
[name]Helen[/name]
[name]Honor[/name] (also matches with [name]Joy[/name])
[name]Harper[/name]
[name]Hannah[/name]
[name]Hera[/name]
I think [name]Hope[/name], [name]Harper[/name] & [name]Honor[/name]/ [name]Honoria[/name]/[name]Honora[/name] work well with the style of your daughter
And [name]Dana[/name], [name]Devon[/name] or [name]Darcy[/name] in the fn spot
[name]Love[/name] the suggestions of [name]Darby[/name] & [name]Dorian[/name]!
[name]Darby[/name] [name]Helena[/name]
[name]Darby[/name] [name]Hannah[/name]
[name]Dorian[/name] [name]Hazel[/name]
[name]Dorian[/name] [name]Holly[/name]
[name]Dorian[/name] [name]Honey[/name]
[name]Dorian[/name] [name]Hattie[/name]
[name]Darcy[/name] [name]Helena[/name]
[name]Darcy[/name] [name]Henrietta[/name]
[name]Della[/name] [name]Honora[/name]
[name]Della[/name] [name]Hope[/name]
good luck!
Donnely or Donelly? Still fits with [name]Hope[/name], which is a terrific mn.
Maybe Belladonna H_________
Or some other fn that contains don?
Maybe even any fn with [name]Holden[/name] in the middle since it kind of mushes both his name and would give both your girls a boy name somewhere in there. Plus that way you get free reign with picking a fn!
Or…
___________ [name]Donna[/name] H__________
With 2 mns. Ex. [name]Gabriella[/name] [name]Donna[/name] [name]Harper[/name]. So you get free reign with the fn and the first middle would really obviously honor grandpa & the second middle would do the initials thing.
[name]Donna[/name] [name]Huxley[/name]
[name]Donna[/name] [name]Heather[/name]
[name]Donna[/name] [name]Harper[/name]
[name]Donna[/name] [name]Harriet[/name]
[name]Donna[/name] [name]Henrietta[/name]
Also maybe just using mn [name]Donna[/name] would be obvious enough that you could forget the original format?
I really like the name [name]Danae[/name] -the greek goddess of music and poetry.
I like your husband’s favorite too -[name]Devyn[/name] although on www.babynames.com it means “descendant of the dark-haired one” I prefer NB’s meaning of “poet”. behindthename.com says it could mean “fawn”, “devine” or “dark” depending on whether it is originally Irish or English.
You mentioned in an earlier post whether you were putting too much thought into the meaning of your child’s name. Personally, I feel the same way. I would not want to give a child a “meaningless” name. However, the meaning could come from a family connection or place name that is important to you or etc. The meaning doesn’t have to come from the definition on one of these websites. So… you could name your baby [name]Denver[/name], if you met your husband there, for example… then the name would have double meaning from the place and your FIL’s initials. 
(I’m not actually suggesting you name your daughter [name]Denver[/name] btw… I don’t think it’s very pretty!!)
I like the idea of giving your 2nd daughter a virtue name and thus connecting the two girls. Middle names aren’t usually used all that much so it is still a subtle connection.
[name]Devyn[/name] [name]Hope[/name] =hopeful poet or devine hope or hopeful fawn??
[name]Devyn[/name] [name]Honor[/name] =honorable poet
both work imo.
[name]Danae[/name] [name]Hope[/name]
[name]Danae[/name] [name]Honor[/name] too.
I’m not a huge fan of [name]Delaney[/name], whether you use the Irish or English meaning (behindthename.com has the two explanations).
I thought of [name]Darby[/name]. So, I second/third the others who said [name]Darby[/name] 
[name]Darby[/name] [name]Hope[/name]
[name]Darby[/name] [name]Honor[/name]
[name]Darby[/name] [name]Honoria[/name] (to get away from the starkness of [name]Honor[/name])
I think I like [name]Darby[/name] [name]Honoria[/name] best.
Ok, if your hubby likes [name]Devin[/name]/[name]Devyn[/name] and you like [name]Delaney[/name]… What about Devany? It sounds like a compromise between the two, and Devany [name]Hope[/name] is really cute with [name]Elliott[/name] [name]Joy[/name].
I want to hug all of you! Thank you so much - your many suggestions and ideas have helped me expand my thinking and I am feeling hopeful again that I will be able to figure out a name I love instead of just “settling” for an OK D.H. name…@ Tax, lilysong, and meganelizabeth-your creative suggestions were extremely valuable. Being that my name means “warrior”, I am liking the idea of trying to match baby girl’s meaning to her great grandpa’s meaning. I found two names with “chief” in the meaning: [name]Quinn[/name] and [name]Torin[/name]. I can’t for the life of me think of a mn that flows well with [name]Quinn[/name] and it does break my rule of no one syllable names since our last name is one syllable. [name]Torin[/name] is a new one to me, but found it attractive. Thoughts?
Possibilities with the 2 mn idea…[name]Torin[/name] [name]Dorothy[/name] [name]Hope[/name]? idk sound like a mouthful…I love the meaning of [name]Dorothy[/name] but not the name by itself really 
I like [name]Torin[/name]! I don’t like [name]Torin[/name] next to [name]Dorothy[/name] though, sorry! It’s the R R thing. I like [name]Quincy[/name] over [name]Quinn[/name] & it gives the name some length. I think it also goes well with [name]Elliott[/name].
Nevermind…husband already shot down [name]Quinn[/name] & [name]Torin[/name].
[name]Delancey[/name]? Like the street in NY? Similar to [name]Delaney[/name], but less popular and you can avoid the meaning you dislike!
[name]Dexter[/name] (NN [name]Dexie[/name]) [name]Hope[/name]
I love [name]Dexter[/name] on a girl-my husband does not therefore I can not use it…
Great suggestion [name]IMO[/name]!
[name]Rowena[/name] - means joy and fame, and was the name of the daughter of a [name]Saxon[/name] chief
[name]Eleri[/name]- also the daughter of a chief
Zuriel - name of a chief in Exodus, means my God is my rock
Cynbel - means chief
[name]Henri[/name] - mean ruler (I know an amazing girl named [name]Henri[/name])
[name]Eric[/name] (or [name]Erica[/name]) - means ever ruler
Cynbel [name]Dahlia[/name] [name]Hope[/name]
[name]Henri[/name] [name]Delaney[/name]