Polar molecules in an optical lattice provide a versatile platform to study quantum many-body dynamics. Here we use such a system to prepare a density distribution where lattice sites are either empty or occupied by a doublon composed of an interacting Bose-Fermi pair. By letting this out-of-equilibrium system evolve from a well-defined, but disordered, initial condition, we observe clear effects on pairing that arise from inter-species interactions, a higher partial-wave Feshbach resonance and excited Bloch-band population. These observations facilitate a detailed understanding of molecule formation in the lattice. Moreover, the interplay of tunnelling and interaction of fermions and bosons provides a controllable platform to study Bose-Fermi Hubbard dynamics. Additionally, we can probe the distribution of the atomic gases in the lattice by measuring the inelastic loss of doublons. These techniques realize tools that are generically applicable to studying the complex dynamics of atomic mixtures in optical lattices.