OK here's what I got per my Sony Blu-ray player (DD 5.1):
[first let me point out that DD AC-3 is the same as DD 5.1; the '3' makes it sound like it's 3.1 so sorry if I misled anyone]
They show a DD or DTS input will produce a Dolby Surround Pro Logic signal via the RCA connectors (with a Dolby Surround Pro Logic-capable receiver can produce 3 to 6 speakers of surround effects). I 'think' this is what one of these DD converter boxes can do (i.e. vs. just a stereo output).
They show that the only way to get full DD is to use the six 5.1 channel output RCA connectors (i.e. from a separate panel of RCAs), the digital connections (coax or optical), or the HDMI connector. Same for DTS.
Also, it shows capable of 8 channel PCM via HDMI only. Not that it matters here but it was the last audio connection category in the manual.
Someday when I get my old Kenwood AC-3 AVR set up to my TV system I'll have to try some converter boxes out to test my Pro Logic theory (the AVR indicates whether or not it is receiving stereo, Pro Logic, or DD). Currently the Kenwood is just being used as a fancy FM receiver. My neighbor gave me his used Bose Acoustimass 1500 (5.1) after his Onkyo AVR quit (he went soundbar) so I'm itchin' to hook it all up. He gave me the Onkyo (THX 7.1 and up to 12 speakers) too but it has no audio out amp or pre-amp...