Yes, the Eritrean-Ethiopian War followed the democratic peace theory, because neither nation has a very strong, committed democracy. Both of these nations still struggle with identity, a strong political system, and basic personal property rights. Because of this, these concerns take priority over democratic issues, and led to war. But that did not violate the democratic peace theory, because neither country is particularly democratic.
The Democratic Peace Theory doesn't make sense in the light of history. Many democracies have waged war on each other, most notably within European history. So when France and England waged war with democratic Germany in WW1 or the US for that matter, was the theory being played out? The same is true with the Eritrean-Ethiopian war.