surround processor?

If you can find one, the Angstrom 200 Surround Sound Processor / DAC / Pre-Amp, designed and built by Mike Moffat of Theta and Schitt Audio.

Although my setup is all balanced Ayre 5 series with a Bryston SP3 used only for surround, I suspect the SP3 itself would make a fine preamp/processor.

I see no need for separate locations. The Ayre preamp and amp drive a pair of KEF Reference 1s and a pair of Velodyne HGS-15s with an SMS-1 bass manager. The SP3 and amps drive a KEF Reference 204/2C center speaker and four KEF LS50 surrounds. All in one location. I have a third HGS-15 that I plan to hook up to the SP3 for LFE.

The first thing to do is forget the notion that stereo recordings must be reproduced with two channels. Recordings maybe mixed down to stereo as it is a better format than mono but it's no reason to insist they must be heard in stereo. Dolby surround does an excellent job and it enhances the listening experience.

It is crucial to set speaker distances as accurately as possible (small hand held lasers are ideal and far better than tape measures). Balancing levels is critical.

I recommend having all speakers from the same manufacturer and if possible the same series. Pre outs are best and identical amplification is ideal as the last thing you want is each channel having a different "sound". Some home theatre systems allow you to turn amplification off and the massive power supplies are then ideal for surround processing.

Five point one is a good starting point, but adding two front wide speakers and two rear surrounds really encases you with sound. That's nine point one and adding four Atmos speakers completes the package.

Four subs really makes a massive difference. I prefer to have them equidistance from the main listening position.

Another crucial consideration is adding super tweeters to each loudspeaker. The difference is so incredible it is unbelievable. The best way to describe it is the recorded sound disappears and you are there hearing sounds as they were recorded. Townshend SuperTweeters are excellent but the cost for multichannels is prohibitive. I've found that BatPure are ideal and they have a higher frequency range. They only have one output level, which is basically the same as Towenhend's position one.

Movies and music are spectacular.

I've mentioned this previously, but it's worth mentioning once more. Loudspeakers can be greatly enhanced by reducing sounds bouncing around in cabinets and contaminating cone movement. Lining the cabinets with sound deadening material and filling the internal space with sound absorption material works a treat,

Millercarbon is a 2 channel purist but don’t hold that against him. He gets it right 100% of the time otherwise :)

I can say this with 100% assurety.
Find a lightly used Classe SSP-800 on EBay or elsewhere. There is one listed now on EBay for $1200! And you could make an offer for $1,000 and he might accept. There is 1 on U.S. Audio Mart for $2100 CAD or $1600 U.S. I’ve seen them awhile back for $2600-3400....I paid $8,000. The only risk is no returns on the EBay one.... So investigation is warranted. But, if it is like mine, it is a tank.

I have 1 and have had it since it near first came out in 2009. 12 years without so much as a hiccup. The SSP has excellent surround and excellent 2 channel. I mean excellent. There is an unadulterated analog pass through/digital bypass and I will soon hook up a Rogue Audio Ares Magnum tube phono preamp to it.......The only thing it doesn’t have is Dolby Atmos and another 1 but you can upgrade the SSP with an upgraded DSP card for $999 and get them.

It also has a great DAC. I stream an upgraded Node 2i to it and it sounds fantastic. The 5.1 surround is excellent as well.

You can have the best of both worlds. 2 channel and surround. At $1000-$1200 or $1600 you cannot touch it with any other processor in the world.

There are several stellar reviews online. One being Robert Harley from TAS who absolutely loved it.
https://www.theabsolutesound.com/articles/tas-194-classe-audio-ssp-800-multichannel-controller-1

And this review:
https://www.audioholics.com/av-preamp-processor-reviews/classe-ssp-800-review/arrival-unpacking-design-overview-features
And I’d be happy to help you out in any way I can should you have any questions.
Good luck!

you might rethink that 100% grade, do some research on what he thinks of digital. Square that up, if you can….