Yes the DSP will handle DSD, but the DAC has to be able to properly interface with it, along with the proper filtering. According to the AKM DAC’s data sheet for the 4385, they do not appear to support out of band noise filtering via an internal analog FIR filter for DSD. I also don’t see how the DAC interfaces with an external DSP for DSD decoding. Perhaps AKM has additional interface circuitry and DSD capable filter topologies/slopes to do the job, and/or they are convering DSD to PCM elsewhere, but Anthem doesn’t list it and data on AKM devices is a bit hard to come by.
It’s weird because their lower grade multichannel DAC’s show DSD interface support:
http://www.asahi-kasei.co.jp/akm/en/product/ak4357/ak4357.html
This block diagram mentions DSD support but it’s not clear how it’s being done nor is it mentioned in the data sheet, Anthems literature or in any current product reviews to my knowledge.
http://www.akm.com/index.asp?cat=dvd
However, the AKM 4383 2CH DAC does explicitly state it has DSD interface support:
http://www.asahi-kasei.co.jp/akm/en/product/ak4383/ak4383.html
The 4395 (used in the Anthem) does appear to be of higher quality, so perhaps Athem is waiting on AKM to release a higher performance DSD/PCM capable pin for pin compatible DAC before doing an upgrade. Also, since the 4383/4395 aren’t pin for pin compatible, that may be another reason for waiting on Anthems part. In any event I am sure they will find a pin for pin compatible work around, or perhaps they have a dual footprint layout to accommodate other devices, or a new daughter card that will be a simple plug in/out process for authorized dealers to handle the upgrade.
I did find this AKM App note (see page9) that briefly mentions an AKM 4396 DAC that handles PCM and DSD. So perhaps this will be the next upgrade path.
http://www.akm.com/AppsNotes/2004apps5.pdf
This looks like a great processor and I am confident Anthem has thought this all through. In the meantime, end users whom wish to adopt DVD-A/SACD formats can do so with a competent Universal player (such as Denon, Pioneer Elites for example) via the Anthems EXT analog inputs and take advantage of its bass management and time alignment (if your Universal player doesn't have such facilties). The sonic degradation (if any) is probably a small price to pay in the meantime to ensure the fomats are being handled correctly.
Sorry our first look article wasn't more detailed and we may entertain a complete review in the future, but right now our plate is full until early next year. With all of the requests to us to cover this product, we at least wanted to prepare something. Stay tuned...