diff --git a/nixos/modules/hardware/device-tree.nix b/nixos/modules/hardware/device-tree.nix
index c568f52ab677..6ab13c0eb709 100644
--- a/nixos/modules/hardware/device-tree.nix
+++ b/nixos/modules/hardware/device-tree.nix
@@ -66,36 +66,32 @@ let
   };
 
   filterDTBs = src: if cfg.filter == null
-    then "${src}/dtbs"
+    then src
     else
       pkgs.runCommand "dtbs-filtered" {} ''
         mkdir -p $out
-        cd ${src}/dtbs
+        cd ${src}
         find . -type f -name '${cfg.filter}' -print0 \
           | xargs -0 cp -v --no-preserve=mode --target-directory $out --parents
       '';
 
-  filteredDTBs = filterDTBs cfg.kernelPackage;
-
-  # Compile single Device Tree overlay source
-  # file (.dts) into its compiled variant (.dtbo)
-  compileDTS = name: f: pkgs.callPackage({ stdenv, dtc }: stdenv.mkDerivation {
-    name = "${name}-dtbo";
-
-    nativeBuildInputs = [ dtc ];
-
-    buildCommand = ''
-      $CC -E -nostdinc -I${getDev cfg.kernelPackage}/lib/modules/${cfg.kernelPackage.modDirVersion}/source/scripts/dtc/include-prefixes -undef -D__DTS__ -x assembler-with-cpp ${f} | \
-        dtc -I dts -O dtb -@ -o $out
-    '';
-  }) {};
+  filteredDTBs = filterDTBs cfg.dtbSource;
 
   # Fill in `dtboFile` for each overlay if not set already.
   # Existence of one of these is guarded by assertion below
   withDTBOs = xs: flip map xs (o: o // { dtboFile =
+    let
+      includePaths = ["${getDev cfg.kernelPackage}/lib/modules/${cfg.kernelPackage.modDirVersion}/source/scripts/dtc/include-prefixes"] ++ cfg.dtboBuildExtraIncludePaths;
+      extraPreprocessorFlags = cfg.dtboBuildExtraPreprocessorFlags;
+    in
     if o.dtboFile == null then
-      if o.dtsFile != null then compileDTS o.name o.dtsFile
-      else compileDTS o.name (pkgs.writeText "dts" o.dtsText)
+      let
+        dtsFile = if o.dtsFile == null then (pkgs.writeText "dts" o.dtsText) else o.dtsFile;
+      in
+      pkgs.deviceTree.compileDTS {
+        name = "${o.name}-dtbo";
+        inherit includePaths extraPreprocessorFlags dtsFile;
+      }
     else o.dtboFile; } );
 
 in
@@ -121,7 +117,39 @@ in
           example = literalExpression "pkgs.linux_latest";
           type = types.path;
           description = lib.mdDoc ''
-            Kernel package containing the base device-tree (.dtb) to boot. Uses
+            Kernel package where device tree include directory is from. Also used as default source of dtb package to apply overlays to
+          '';
+        };
+
+        dtboBuildExtraPreprocessorFlags = mkOption {
+          default = [];
+          example = literalExpression "[ \"-DMY_DTB_DEFINE\" ]";
+          type = types.listOf types.str;
+          description = lib.mdDoc ''
+            Additional flags to pass to the preprocessor during dtbo compilations
+          '';
+        };
+
+        dtboBuildExtraIncludePaths = mkOption {
+          default = [];
+          example = literalExpression ''
+            [
+              ./my_custom_include_dir_1
+              ./custom_include_dir_2
+            ]
+          '';
+          type = types.listOf types.path;
+          description = lib.mdDoc ''
+            Additional include paths that will be passed to the preprocessor when creating the final .dts to compile into .dtbo
+          '';
+        };
+
+        dtbSource = mkOption {
+          default = "${cfg.kernelPackage}/dtbs";
+          defaultText = literalExpression "\${cfg.kernelPackage}/dtbs";
+          type = types.path;
+          description = lib.mdDoc ''
+            Path to dtb directory that overlays and other processing will be applied to. Uses
             device trees bundled with the Linux kernel by default.
           '';
         };
diff --git a/pkgs/os-specific/linux/device-tree/default.nix b/pkgs/os-specific/linux/device-tree/default.nix
index fb8e92f23306..1a50d799b4b1 100644
--- a/pkgs/os-specific/linux/device-tree/default.nix
+++ b/pkgs/os-specific/linux/device-tree/default.nix
@@ -1,6 +1,29 @@
-{ lib, stdenvNoCC, dtc }:
+{ lib, stdenv, stdenvNoCC, dtc }:
 
 with lib; {
+  # Compile single Device Tree overlay source
+  # file (.dts) into its compiled variant (.dtb)
+  compileDTS = ({
+    name,
+    dtsFile,
+    includePaths ? [],
+    extraPreprocessorFlags ? []
+  }: stdenv.mkDerivation {
+    inherit name;
+
+    nativeBuildInputs = [ dtc ];
+
+    buildCommand =
+      let
+        includeFlagsStr = lib.concatMapStringsSep " " (includePath: "-I${includePath}") includePaths;
+        extraPreprocessorFlagsStr = lib.concatStringsSep " " extraPreprocessorFlags;
+      in
+      ''
+        $CC -E -nostdinc ${includeFlagsStr} -undef -D__DTS__ -x assembler-with-cpp ${extraPreprocessorFlagsStr} ${dtsFile} | \
+        dtc -I dts -O dtb -@ -o $out
+      '';
+  });
+
   applyOverlays = (base: overlays': stdenvNoCC.mkDerivation {
     name = "device-tree-overlays";
     nativeBuildInputs = [ dtc ];