They communicate. Usually just 3 or 4 words, something like:
Hup! (Faster)
Woah! (Slower)
Pass! (Go for the overtake)
At the 6-Day, you draw lots for your pacer so it’s perfectly possible for a rider to be paced by half a dozen different Pacers over the course of the races.
If you’re doing a specific Derny race (like the Derny Champs) then you choose your pacer and you effectively enter as a pair.
How much distance is allowed between the Derny and the cyclist before (presumably) both are DQd?
No limit, you can hit them although it’s obviously extremely dangerous to do things like that!