Using is reducenot a good idea in this case. In addition, your lambda function has incorrect logic in general, because you are trying to update all dictionaries together, and not their elements see the following:
>>> a={'a':[1,2], 'b':[4,5],'c':[6,7]}
>>> a.update({'a':[4], 'b':[56],'c':[46]})
>>> a
{'a': [4], 'c': [46], 'b': [56]}
But, as a more efficient way, you can use the method dict.setdefault:
>>> new={}
>>> for d in list_of_ds:
... for i,j in d.items():
... new.setdefault(i,[]).extend(j)
...
>>> new
{'a': [1, 2, 4, 92], 'c': [6, 7, 46, 43], 'b': [4, 5, 56, 65]}
Also you can use collections.defaultdict:
>>> from collections import defaultdict
>>> d=defaultdict(list)
>>> for sub in list_of_ds:
... for i,j in sub.items():
... d[i].extend(j)
...
>>> d
defaultdict(<type 'list'>, {'a': [1, 2, 4, 92], 'c': [6, 7, 46, 43], 'b': [4, 5, 56, 65]})