Yep, this is perfectly legal. The full cycle is this:
Say the DH is hitting for F9. DH hits safely and F9 comes into pinch run, DH has left the game and DH role is terminated. Since DH was a starter, DH can re-enter. Later in the game, F9 comes to bat, again this is legal since F9 replaced the DH in the batting order. Still later, DH comes into the game to pinch hit for F9, DH has replaced F9 and has re-entered the game. This is the first time out for starter F9, so she can re-enter. When the team goes back out on defense, F9 takes her position on defense, she has replaced the DH who can no longer enter the game, she's done. Finally S1 pinch hits for F9, now F9 is done and S1 must go out on defense or be replaced by S2.
Of course all of these changes must be reported to the PU as they happen or you have an unreported substitution, but that's a whole 'nother rule.
Hope that helps.
[Edited by SamNVa on Apr 26th, 2001 at 11:45 PM]