I think the problem might be that the path consists of thousands of disconnected subpaths, as they often do when imported as dxf.
What do you get if you do 'Path -> Break apart' (use undo after this operation). Do you get lots and lots of paths? If so, after undoing, switch to node tool, select all nodes in your path, then click on the icon with the tooltip 'join selected nodes'. This will join all the ends of subpaths together.
Note that, if your result is meant to consist of a path that is not closed, you need to avoid selecting the 'real' end nodes, else they will be joined, too.
Afterwards, try the simplifying again.