My dad is in the ICU for acute pneumonia. Has diabetes and partial kidney failure as well. Will dialysis help in recovery and in reducing lung fluid?

It depends. Dialysis would be needed for severe renal failure that is causing significant metabolic abnormalities or fluid overload. It may not necessarily help in cases of mild or moderate renal failure and pneumonia. It definitely wouldn't help remove the inflammatory fluid from a pneumonia. I hope this helps and that your father improves.