Ok, after reading all comments, I am still a little confused, I need help here; is this possible?
I can use a PC to send sound to the DM7 via USB and video to a TV via HDMI and I pair 4 excellent stereo amps like Audiophonics HPA-S400T to the DAC , then I get a system that outperforms technically any AVR known by man? Is windows and software required up to the task? could you do Dolby Atmos?
Yes. Very active thread so hard to keep up, but 8 channels on a HTPC (probably more in Mac since you can aggregate devices) is rather trivial. On Windows the Atmos codec is free and DTS is $20 IIRC. From there you also have access to basically every room correction option on the market instead of just Audyssey, YPAO, etc. Dirac recently making strides on AVRs, though. When I tried with Apple Music Atmos, the results were strange - it ignored surround back in favor of rear heights. I think apps are a lossy 5.1 Atmos stream (TrueHD? I always get them confused)
Now, that being said, I'm a Microsoft cloud architect by trade and in spite of my comfort level managing thousands of Windows servers daily I still find all of the above too complicated. While I can certainly relate to the propeller head mindset, add up everything above and then price a Denon 3700 which does it all for you WITH some modicum of support if you get stuck along the way. What are you saving? $300-$400? Is that worth 50 hours trying to integrate it all yourself? For some, yes absolutely but I suspect not for most. And if you're expecting your Frankenstein to run smoothly while you're out with friends and your family's trying to have movie night without you, I have news for you...
Finally, for me the deal breaker is lack of upmixing support. I'd have to buy an AuroMatic plugin to the tune of ~$500 (although if Auro can stay afloat it appears Win10 is on the way) and I'm not sure there are upmixing options for Atmos/DTS/Dolby on a HTPC, certainly not beyond 8 channels.
If I were to buy one of these, it'd most likely be a 5.x setup. but again, as many have stated, this isn't a drop-in AVR replacement. It CAN get close if you want to put in the effort, but I don't think it's justified given how easy it is to find a b-stock AVR at a similar price point (accounting for software). And of course, most AVRs have amps which corssed over at 80Hz+ are almost certainly adequate for surround/height channels. If you're planning on doing something like active monitors plugged into different outlets with this device, you might as well budget for hum eliminators up front.