How does the digital bypass on home theater processor work

@bomber52

I didn’t quite understand your question.
So you want to use your Mytek Brooklyn DAC Plus as a DAC/preamp for your stereo needs and you wanted to connect your Mytek to your AV pre pro? Is that right? What pre pro do you have? All AV pre pros have built-in DAC. And you said your pre pro does not have DAC? What kind of AV pre pro Is that?

The analog bypass or digital bypass mode on the AV pre pro means simply bypassing the DAC, DSP and other digital processings in the pre pro so that it will be used as an analog stereo linestage preamp. But you will still be using the linestage preamp (volume control) section in your pre pro. You control the volume in your pre pro. And you can simply use your Mytek Brooklyn DAC Plus as a DAC only (source component only) and disable the volume control by setting the output of your Mytek Brooklyn to fixed gain and connect it using analog interconnects to your pre pro.

Cause people who normally have the Mytek Brooklyn DAC Plus and if they want to use it both as a DAC and a preamp as well (using volume control) will connect the Mytek Brooklyn directly to a power amp.

It will still be possible to use your Mytek also as a preamp and use the volume control in the Mytek but first you will have to select the analog bypass or digital bypass in your pre pro then connect your Mytek via analog to any stereo analog audio input (usually aux input) on the pre pro and set the volume of your pre pro at 80 out of 1 to 100. Cause 80 (out of 1 to 100) is usually a reference setting for unity gain in linestage preamp. But it isn’t advisable and I wouldn’t do that if I were you.

I would set the output of your Mytek to fixed gain thus disabling its built-in volume control and use your Mytek as DAC only (source component only) and use the volume in your pre pro and set your pre pro to analog bypass or digital bypass mode whatever you wish to call it. That way you will be using your pre pro as an analog stereo preamp when listening to stereo music sources through your Mytek Brooklyn DAC Plus. Does that make sense?

What kind of pre pro do you have? Some high end pre pros are good when used as an analog stereo preamp in bypass mode. Such high end AV pre pros such as the Bryston SP3, Classe SSP 800, Classe Sigma SSP, Krell Evo 707, Krell 1204u, Meridian Ref 861 v8 will sound quite musical and pretty good when used as an analog stereo preamp in bypass mode (analog bypass or digital bypass mode thus bypassing DAC, DSP and other digital processings in the pre pro). It isn’t the same as a HT bypass or HT passthrough. HT bypass or HT passthrough can only be found in stereo linestage preamps or stereo integrated amps. You will not find this feature in AV pre pro. HT bypass or HT passthrough feature means disabling the volume in the stereo linestage preamp and the signal will forwarded straight to the power amp.

Or if you have a lower end pre pro that does not perform well when used as a stereo analog preamp in bypass mode then you can add a good quality stereo analog linestage preamp that has a HT bypass or passthrough feature. Then you can connect your Mytek Brooklyn DAC via analog to any analog linestage input on the stereo preamp and connect your pre pro to a HT bypass input on the stereo preamp. So when watching surround movies (home theater) you control the volume from the pre pro and select the HT bypass input on the stereo analog preamp. But when listening to stereo music sources through your Mytek Brooklyn DAC you control the volume from the stereo analog preamp and you don't even have to turn on your pre pro at all.

I don't think the Mytek Brooklyn DAC Plus has an analog input. After all it is a DAC that happens to have digital volume control built in. 

Sorry my bad it turns out that your Mytek Brooklyn DAC Plus has one pair of analog input (rca) that can be configured as either linestage or phonostage input. But your Mytek does not have HT bypass or HT passthrough function. Therefore, you cannot use your Mytek as an all-in-one preamp and cannot expect to function as both linestage, phonostage and HT bypass. You will need a dedicated stereo preamp that can do all those functionalities. Or get a high end pre pro that performs really well in stereo for your stereo music playbacks for simplicity.

Out of the 3 pre pro choices that you listed above I highly recommend the Classe Sigma SSP if you value stereo performance for 2ch music playbacks. The Classe Sigma SSP is optimized for stereo music playbacks and its stereo performance is very good very musical especially coming from an AV pre pro whether when used as an anolog stereo preamp in bypass mode or when used as a digital stereo preamp connected via its USB input. But the Classe Sigma SSP lacks phonostage.

I suggest that you connect your Mytek via XLR analog to the XLR stereo analog input on the Classe Sigma SSP and set the Sigma SSP in digital bypass mode thus bypassing its DAC, DSP and other digital processings so the analog signal is kept in analog domain all the way to analog output stages, or otherwise DSP and other digital processings will get in the way and would have negative impact on sound quality. But first you must set the output of your Mytek to fixed thus disabling the volume control.
So you will use the volume in the Classe Sigma SSP basically you will be using the Sigma SSP as as analog stereo linestage preamp.
If you go with the Classe Sigma SSP you wouldn’t be needing a dedicated stereo preamp that has HT bypass function. The Sigma SSP performs really well in stereo and is optimized for stereo music playbacks.

As for phonostage I highly recommend that you get a standalone dedicated external phonostage preamp for your turntable. Standalone dedicated external phonostage pre will perform and sound way better than the one built in the preamp or pre pro or integrated amp. I highly doubt that a phonostage in your Mytek is any good either. Phonostage preamp plays important role for musical reproduction of your analog rig (turntable). There are countless options out there when it comes to dedicated standalone phonostage preamps depending on your budget. Audio Research, Musical Fidelity, Rogue, Cary, Rega, Naim, Pass make very good phonostage preamps. You can connect the phonostage pre via rca analog to the rca stereo analog linestage input on the Classe Sigma SSP and again you will have to select a digital bypass mode for that input on the Classe.

However, the Anthem AVM60 performs extraordinary in surrounds for movies (home theater) with its ARC2 (Anthem Room Correction) engaged and properly calibrated but its stereo performance for 2ch music playbacks isn’t on par with the Classe Sigma SSP. The Sigma SSP stereo performance is superior to the Anthem AVM60. But for surrounds or home theater the Anthem AVM60 will be a better choice than the Classe Sigma SSP and will likely outperform the Sigma SSP. If you go with the Anthem AVM60 I suggest that you get a high quality analog stereo linestage preamp that has HT bypass or HT passthrough feature for your stereo music playbacks. I think Soix has already given you instructions above on how to do it.

I would stay away from Rotel AV pre pro if I were you. Rotel always has had persistent issues with their HDMI switching boards and are very buggy. They also have firmware bugs and glitches with their AV processors and receivers. Rotel makes great sounding and musical amplifiers for the money. Their power amps, stereo integrated amps and stereo preamps sounded very good for the price but their AV processors and receivers are buggy.
Just wanting to warn you ahead of time.

Good luck and let us know what you end up getting.

The ARC2 (Anthem Room Correction) is one of top notch room correction and will make big difference for surrounds (HT) when set up and calibrated properly. 
The Anthem AVM60 is a perfect choice for home theater when set up right and calibrated properly using its ARC2 and it performs spectacular. And at $3k new retail price I think it's a steal IMO.