Actually, you're allot closer to being right on than you may think. DSD (1-bit two level Pulse Density Modulation) isn't digital in the first place, it's ANALOG! PCM is digital, in that it's a sequence of discrete 2's complement binary words of n bits, with each word being a stand alone digital expression of an analog signal level, at the sample time. It's just like frames of movie film, strung together to convey motion.
DSD, a Sony/Philips marketing term for a 1-bit two levels analog format is as analog as AM or FM radio. Like them, it's simply a signal modulating a carrier for transmission purposes, and detected at the receiving end to retrieve the signal. Unlike them, instead of modulating the amplitude or base frequency of a carrier, it modulates the density of pulses. This occurs as a hunting/feedback process in a Delta-Sigma Modulator, creating a pulse stream clocked at the sample rate who's density is proportional to the signal level. No frames, no words, all continuous, and most distinguishing, no weight or value! That's why it has to be either converted to PCM to be processed in a computer, or converted to multi-bit Pulse Density Modulation, ala the Sonoma DAW.
Since it by definition has only two levels, a computer can store and retrieve it, just not process it, because it does not represent actual sample values. All it represents is change of levels through the density of the pulses in a continuous pulse stream. The higher the level, the denser the pulse chain. ANALOG!
That's why you're correct saying just filter it, and get the signal back.