Can a Delta-Sigma DAC translate both DSD and PCM streams to analog?The answer is definitely YES.
I would view with appropriate suspicion the views of those who assert that modern delta sigma chips are inherently inferior, even as applied to PCM. First, IMO you must completely discount the views of a manufacturer (like Mojo Music) who markets a unit using a different kind of chip.
Delta sigma chips have become a target for condemnation because they are ubiquitous. Consider the ESS9038pro Sabre. It’s relatively inexpensive because it is produced in great quantity. It probably has more R&D behind it than any other chip by far. Because it is relatively less expensive its implementation in consumer devices varies from very simple (and cheap) to superb.(and expensive). But they all can tout they use an industry-leading DAC chip.
Bottom line is that some of the best sounding and best reviewed devices use the ESS chip. Many other devices using other chips and technologies are also great sounding and well reviewed. There are those who speak of a sound signature of particular chips. IMO the sound of a modern well designed unit should be of the software and not of the chip. In well designed units that’s what i expect to hear, the particular chip notwithstanding.