DSD (PDM) v. PCM
DSD is roughly equivalent to 88/20-bit PCM, so both are high resolution. Both provide excellent sound.
The disadvantage to DSD (Sony’s name for PDM - pulse density modulation) is that it cannot be edited and, thus, must be converted to PCM for editing. Thus, it is very rare to obtain a “pure” DSD recording that has not spent a good share of its life as PCM. (Query: if it is turned into PCM at some point, has any benefit of being DSD at one time been permanently lost?)
(As an aside, converting a DSD/PDM stream to PCM and back again is a lossy process. We like to think it is just math, but it is not: PDM data has no direct equivalent to PCM data. Thus, the conversion requires interpolation. The inaccuracies are tiny, but present.)
On to the next concept: All digital data begins and ends as PDM, whether it is PCM or PDM/DSD in the consumer’s possession as a stored music file. Weird, huh?
PCM ADCs work by first converting analog into PDM, as a single bit data stream. This signal than passes through a decimation filter (love this term) to turn the signal into multi-bit PCM.
At the other end, PCM is transcoded into PDM prior to decoding. In both cases, this is because it is a lot easier to build a quality PDM DAC or ADC. As a result, almost all are PDM based. (There are a few exceptions.)
One would think this would give the advantage to PDM/DSD as long as it is recorded, never edited, and then played on a PDM DAC. Not only are such recordings rare, modern PDM/DSD ADCs and DACs are almost always multi-bit - not pure 1-bit PDM. As a result, any theoretical difference/advantage of PDM is at least partially lost as the pure PCM/DSD signal will be decimated to 4-bit (I think this is the most typical) making it more like PCM as PDM is played back. (Kudos to the DS for avoiding multi-bit decimation).
In addition to being impossible to edit, PDM also contains the disadvantage of carrying a lot of noise on the signal. The noise begins at roughly 30kHz and rapidly increases so that by 40kHz the noise is louder than any high frequency signal that may be present in the original sound. The low pass filters necessarily applied to the signal begin significantly filtering out the signal at roughly 35kHz. Does this matter? I do not know. Does it matter if a PCM file is 96/24 and thus able to produce up to a 48kHz waveform?
Both high resolution PCM and PDM allow for gentle reconstruction/low pass filters. PCM employs them to avoid aliasing artifacts to reach the playback system; DSD/PDM to keep high frequency noise from doing the same. This strikes me as a draw.
While there is some truth that 1-bit PDM/DSD is more analog like in its digital representation of the signal, this does not recognize that PDM DACs are multi-bit. Even if they were 1 bit, a lot more processing takes place even in 1-bit playback than PDM/DSD aficionados like to admit. (The DS appears to avoid this. )
The advantage of PDM/DSD is that, in its purist form with true 1-bit ADCs and DACs, it is a less processed signal. Such equipment does not exist in the current world of audio recording and playback (or is incredibly rare). The big disadvantage to PDM is that it must be turned into PCM to be edited in any way, making it very hard to work with. It can only be transcoded to PCM or FLAC (etc.) process.
PCM has both a wider bandwidth and greater S/N. It is easy to edit for both the recording engineer and the consumer, and it can readily be transcoded to other formats (FLAC, MP3, etc.)
A huge advantage for purveyors of PDM/DSD/SACD: it is easy to encode an acoustically transparent anti-piracy code in the data stream.
Whether one sounds better or is up to the listener.