For what it's worth, putting ads on a search engine like Google or Bing is usually called SEM, search engine marketing. SEO is search engine optimization which is the free results that Google and Bing get from looking at text on a site, links to it, etc.
You are allowed to buy competitor brand ads still, as far as I know. Typically it is not worth it because people don't click much, and the search engines charge less for clicks if lots of people click and more for the clicks if not many people click... But there might be enough brand confusion here that people are confused and think the top result is DPNW.
Most people just make the headline of the ad include the words you searched for, and it is possible that DPI didn't intentionally bid on this term but rather just said they wanted to bid for any search that includes "delorean parts" or maybe just "delorean" no matter what else is in the search. So I'd be cautious about ascribing devious motives here. I've seen a bunch of DPI ads lately too, I think on Facebook, so they might just be testing a bunch of stuff out to see what works.
Anyways I'm just pumped that there's finally a topic on this board I know something about! It's either this or late 90s RPG video games, or else I will continue to just be a listener/learner in these threads :-)