No, that is incorrect.
Denon's Direct and Pure Direct modes absolutely BYPASS all TONE CIRCUITS (DSP, EQ, RC). Denon states that perfectly clear. Absolutely no tone circuit, which is RC, EQ, DSP.
I finally talked to someone at Denon regarding Pure Direct & Direct 2.1.
Pure Direct 2.0/ Direct 2.0 is simply using the DAC to output 20Hz-20kHz signal.
The only extra step Denon has taken w/ PD2.1/D2.1 is using a discrete analog crossover circuit to output 20-80Hz signal.
This discrete analog crossover circuit is not DSP. It is in ANALOG form. It does not need to be converted back to digital (ADC).
So the answer is Denon uses one extra step with a discrete analog crossover circuit to simply output the bass signal to the subwoofer.
Apparently this extra step requires extra money, especially with the AVP-A1HDCI since it has to also be a fully balanced differential discrete circuit.
Onkyo, Yamaha, and most people don't want to implement this extra dedicated circuit probably due to cost.
I knew there was a reason Denon costs more.