The line input is digitised and the EQ is performed in the digital domain. Note that this entire process is taken care of internally to the DSP, and the main processor doesn't get to see the data (although the Mk.2 does have a facility to sample the line input indendently of the DSP).

Signal degredation through the digitisation process is very minimal.

The full disk check is triggered by date on the Mk.2 (not sure about the Mk.1).

Rob