Does the "7.1 Direct" input carry out any D/A conversion? From the manual it states that "these connections are pure analogue for best sound quality and no DSP processing or Bass and Treble adjustment by the AV Receiver is possible".

No D/A or A/D conversion takes place either in the 7.1 Direct input, or on any other input if the 'Analogue Stereo Direct' button is pressed on that input. 

This 'Analogue Stereo Direct' button is not an option on the 7.1 Direct input, as this is what the 7.1 Direct input already effectively is.

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