I can't see how old your DS is peekaboo, but i don't see it as lying. I totally agree with the pps about the gift being about the thought and love from the giver. You don't have to like the gift but hurting someone's feelings because you are not enamoured with something someone has taken the time to choose for you isn't ok.

While honesty is always the best policy, sometimes there's an appropriate time and place to express those. I guess depending on his age and social skill level that might be still yet to be discovered.