There is currently no way to read library books with DRM from Overdrive on the iPad or iPhone short of removing the DRM, which is illegal in the US.
- Kobo reader does not support side-loading of books.
- Txtr does support side-loading books, but does not support remote authorization, which is required for books with time-limited DRM such as those borrowed from the library.
- iBooks will not read ePubs with DRM that are not purchased in the iBooks store.
Relevant links: