Different metabolomics tools have emerged as a dynamic method for qualitative analysis of various dairy products to reveal their functionality. Functional dairy foods are witnessing a surge in their demand because of convenience, improved nutrition profiles, intriguing flavors and textures, and natural ingredients. Valorization of oilseed by-products could be useful to enhance the functionality of milk products. This work involves the incorporation of a flaxseed meal powder into an Indian heat-desiccated dairy product, i.e., Peda. Additionally, HR-MS and GC–MS tools were used for the identification of dominant bioactive compounds in the FMP-added Peda. The observed 24 metabolites in the HR-MS run are acids, sugars, alcohols, derivatives, etc. that exhibit a range of bioactivities such as brain activity promotion, antioxidant and anti-diabetic attributes, anti-inflammatory characteristics, cardiovascular-protective effects, etc. HR-MS and GC–MS based metabolomics proves to be an accurate and robust tool for the identification of differential metabolites and fatty acids in various types of processed dairy products. Valorization of plant-based substitution such as flaxseed meal addition into the dairy products is a sustainable and healthy alternative for functional food development.