Each channel would be a separate PCM stream. The PCM format can support this (HDMI 1.1 and 1.2 will work with DD+ and the other future HD disc formats by decoding the source to eight channels of PCM audio). I think that PCM would really be the only way to go with this - by the time you put a separate external processor that does DD/DTS decoding as well as EQ, you may as well just drop the first unit out and use the second one for everything.