Typically the DAC does the upsampling. This could be a standard upsampling frequency, say 24/96 or 24/192, or some DACs allow you to select the upsampling frequency
However, my North Star transport also upsamples. Using the XLR output I can set a switch to allow 24/96 upsampling. Using the I2S output I can set a switch to allow for 24/192 upsampling. If I do this, then in XLR mode I can upsample the 24/96 signal to 24/192 at the DAC (which also happens to be a North Star), or with the I2S mode the DAC just accepts the 24/192 signal and passes it through.
However, my North Star transport also upsamples. Using the XLR output I can set a switch to allow 24/96 upsampling. Using the I2S output I can set a switch to allow for 24/192 upsampling. If I do this, then in XLR mode I can upsample the 24/96 signal to 24/192 at the DAC (which also happens to be a North Star), or with the I2S mode the DAC just accepts the 24/192 signal and passes it through.