A DSP between my transport and DAC will convert with it’s own DAC, do its eq, then convert back to the undecoded format (ADC). Then my MHDT will see it as before.
Sorry but for this specific case, your example is incorrect. The signal remains in the digital domain and is converted to analog only at the last stage, the DAC.
Transport --> S/PDIF --> Math is applied --> S/PDIF --> DAC
DSP, or Digital Signal Processing, performs math on the digits, so the S/PDIF data stream is practically it’s native language.
An example of what I’m suggesting in this specific case would be this:https://www.minidsp.com/products/minidsp-in-a-box/nanodigi-2x8-b
It has digital inputs and outputs only and not a single analog part inside. :) In my case though, since all my signals come from Roon and I lack a spinner:
Roon (CPU does the DSP to the digits) --> Wifi --> Streamer --> USB --> DAC
Again, no conversion to analog happens until the last stage, where my Mytek Brooklyn takes the output of the streamer and feeds it to my integrated amp. Lastly, third option, is to use a miniDSP with built in streaming, AND digital inputs: https://www.minidsp.com/products/streaming-hd-series
So, in the third case, your transport AND your streaming goes through the same device, adding EQ to everything equally. In all three of these cases your existing DAC is the only place where digits are converted to analog signals.