I think it might be the case of errors in the terminology used Craig - I can understand what he's meaning, and may have just confused the two.
With Bluetooth (in very simple language), the two devices have to be able to share common profiles and codecs in order to operate. Most popular profile for audio at the moment is A2DP (Advanced Audio Distribution profile). Within the profile there are a variety of codecs - including SBC (low level and most common minimum), aac and aptx. Each has different bandwidth limits.
So assuming I have an iPhone and good Bluetooth compatible headphone (I have an iPhone SE and FiiL Diva - the combo is excellent) - then the two devices will use the A2DP profile with the aac codec. If I have MP3 files, they will be digitally converted to aac "on the fly" and transmitted to the headphones. The headphones will then convert that signal to analogue.
If I'm using the X7 and both devices support aptx (and I'm playing FLAC files), there is still conversion (and some compression). AptX uses ADPCM - so the FLAC file is converted sent, and then decoded by the DAC in the headphones - to analogue.
So there is digital conversion at the source - into a codec that both devices can transmit/receive. But Craig is right - the actual analogue conversion occurs at the headphones.
Now the interesting thing is that for Apple users, using aptX (I know they can't use aptX from Apple devices) would conceivably be worse than using the native aac that is currently used. The reason is that for their aac files, there is no digital conversion - they can be transmitted "as-is".
I've tried both aac and aptX enabled devices - and I can't really tell any difference. To em the pre-requisites are that the recording is good, the hardware works well, and that the Bluetooth signal is strong enough to hold without dropouts. The X7 actually handles Bluetooth pretty well. But as far as signal strength goes, my iPhone still does a better job. Of course that all changes when switching to a wired connection