Wadia iTransport and Classic iPod's EQ setting

I own a Wadia iTransport 170i, used with a 120GB iPod Classic and an outboard DAC via COAX digital cable.

When I change the EQ setting on the iPod, the sound would also changes.

To my understanding, if the iTransport takes the pure, unaltered digital signal out of the iPod (bypass the iPod's internal DAC), this digital signal should not be effected by the iPod's sound processor, but my experience proves otherwise.

Am I missing something or does the iPod processes the digital signal BEFORE it goes through its internal DAC? (That's why the digital signal extracted by the iTransport was effected by the iPod's EQ?)

Thank you very much for your forth coming explanation.
You would think the processing is after the digital. Call Wadia (734)786-9611 to find out for sure. I will try mine later to find out because I use the "Rock" EQ setting on my iPhone.
Holy Crap! You're right - I just went in and checked mine, and EQ adjustments on my iPod Classic 120GB *ARE* heard through my system. I've gloated to myself how a CD in my transport going through my CAL Alpha DAC doesn't sound as good as the same CD downloaded in Apple Lossless format into iTunes and then played from the Wadia through the same DAC. I thought I had eliminited all the variables when I did my comparisons.

This changes all that (I, too, use the 'Rock' EQ setting on my iPod when listening via my earbuds), and seems totally counterintuitive that the iPod's EQ settings would affect the 'purely' *digital* output. What's weird is I could swear that when I've used a regular docking station (like I have in my car) changes in EQ settings aren't heard then - I've previously only heard differences in EQ settings when using the headphone 'out' on the iPod.

I just checked mine and you guys are right that the sound changes and I am using coax out of the Wadia into a PS Audio DL III. I don't get it but maybe the EQ is imposed in the digital stage prior to output. My new Alpine car stereo does the same thing but I didn't expect that to be the same as the Wadia transport. Still sounds good but that's because of the DAC IMHO.
I just got back an email from Wadia, and they said that the EQ was done before the DAC, and only volume and balance is after the DAC that's why the volume doesnt have any effect. They suggest to leave the iPod's EQ in OFF position.
The DAC in the iPod is not used with the Wadia. The EQ is probably applied during the decoding of the lossless file. You're getting your terms confused. DAC = Digital-to-analog conversion.
Sorry, nevermind. I interpreted Jaytea's post wrong (shouldn't post before coffee). Yes processing after the DAC wouldn't be heard with the Wadia.
Whatever, mine sounds awesome and I listen to my system even more now when I am around it. I used to play CD's with my integrated, now it's so easy to just place the iPhone for a charge and listen. My files are ACC 256 files but my DAC is set for 192 kHz.