I don't believe that's how it works.
@peng would you be kind enough to weigh in?
The X8500H with internal amps turned off has a SINAD of 104 which isn't too shabby. But I'm pretty sure the signal in your situation is still going through the 4700's DAC. That is how amir tested the Denon DAC, on Pure Audio.
I'm of the understanding that I could feed the Denon with a 130 SINAD signal and it will go through the DAC to be reprocessed and come out 104. Anyone please correct me if I am wrong (I hope I am wrong)
I believe Pure Audio simply bypasses DSP, but still uses the internal Denon DAC