The Red and Whites are currently second in League A Group 2, level on points with third-placed England and two behind leaders Belgium, while Iceland are rock bottom of the section on zero points.
Two wins, one draw and one defeat from four matches has seen Denmark collect seven points, which as mentioned, leaves them in second position in the section behind Belgium.
The fact that Belgium and England will lock horns on the same night makes this particular match even more important for Denmark, who will be desperate to pick up another three points ahead of their final group fixture away to Roberto Martinez's side on November 18.
Kasper Hjulmand's team only gathered one point from their first two matches of the 2020-21 Nations League at home to Belgium and away to England, but they beat Iceland 3-0 on October 11 before recording an impressive 1-0 victory at Wembley three days later courtesy of a penalty from Christian Eriksen.
The Red and Whites will also be present at next summer's European Championships, having finished second behind Switzerland in Group D and could be a team to watch in the competition.
Iceland, meanwhile, suffered heartbreak in their Euro 2020 playoff clash on Thursday night, conceding two late goals to Hungary to suffer a 2-1 defeat.
Everton's Gylfi Sigurdsson had sent the visitors ahead in the 11th minute, but Loic Nego and Dominik Szoboszlai both registered in the final exchanges to ensure that Iceland will miss out on a spot in the finals.
The result will have been incredibly difficult to take, and it would therefore not be a surprise to see a slightly withdrawn and downbeat Iceland side take to the field for this match.
Erik Hamren's side have actually lost all eight of their UEFA Nations League matches since the start of the tournament, including all four matches with England, Belgium and Denmark in 2020-21.
The Euro 2016 quarter-finalists will be keen to end their losing run in the competition, but they have two difficult matches away to Denmark and England to come.
Denmark Nations League form: WDLDWW
Denmark form (all competitions): LDWWWW
Iceland Nations League form: LLLLLL
Iceland form (all competitions): LLWLLL
Tottenham Hotspur's Pierre-Emile Hojbjerg should again line up alongside Borussia Dortmund's Thomas Delaney in midfield, while Chelsea's Andreas Christensen will continue alongside captain Simon Kjaer in central defence.
Perhaps the biggest talking point surrounds the left-back spot, but Joakim Maehle impressed in that area of the field against Sweden and could earn another starting role.
As for Iceland, Hamren is expected to make changes from the side that lost to Hungary on Thursday night.
Denmark possible starting lineup:
Schmeichel; Wass, Kjaer, Christensen, Maehle; Hojbjerg, Delaney; Poulsen, Eriksen, Braithwaite; Dolberg
Iceland possible starting lineup:
Halldorsson; Palsson, Arnason, R Sigurdsson, Magnusson; Gudmundsson, Traustason, Skulason, Sigurjonsson; G Sigurdsson; Sigthorsson
We say: Denmark 2-0 Iceland
Iceland will enter the match low on confidence, but the same cannot be said for Denmark following an impressive run of results. In truth, we are not expecting a surprise result on Sunday evening, backing the home side to run out routine winners in the League A Group 2 fixture.