I only have PCM. In fact, I listen to a lot of spotify (non-premium) while the rest of my collection are Flac rip from my XRCD's. Very enjoyable to listen too (ok, depends on the source too ... bad recordings will sound bad still). lol
But if you want to listen to a bad recording, you can knock off some of the hard edges by engaging the Minimum Phase filter.
The micro iDSD continues to impress here. In the past and with certain CDs in my collection I have become aware that I am gritting my teeth as I listen to them. This no longer happens since the arrival of the micro iDSD. It is a very smooth performer with a very detailed and well separated treble that isn't harsh (unless the recording is harsh). The sound has great depth and seems to reveal layers of sound I wasn't previously aware of or at least was less aware of. I should add that I use the 3D function nearly all the time now. It certainly sounds different to the Audiolab (more later when it's fully burned in) but is giving me 'WOW' moments on a regular basis just like the Audiolab does.