Thanks Cam - this is helpful and makes sense.
So that leaves two paths - PCM through R2R ladder (for PCM native, PCM upsampling, or DSD native / upsampled which is converted to PCM when DSD Direct is off), and DSD direct through 1 bit dac (for DSD files, native or upsampled, where DSD Direct is on).
Interestingly, i installed HQ player remote over the weekend on my phone (as a/b testing Roon upsampling and HQ filters was a real challenge when the Mac Mini is on other side of house). With HQ player, I am not getting any pops for DSD files when DSD direct is off, per our discussions previously.
Also - HQP remote is a super handy way to quickly change between DSD / PCM and any range of filters to determine what you like best. Have ended back on PCM with this (for awhile at least). Instruments are more realistic, however, it comes at the expense of a slight veil which is not there with DSD upsampled files.
EDIT: it is so good (for me at least) to understand how exactly the DSD direct function is working. thanks
@camrector for chasing gustard on this!.