Are streamers digitally enhanced?

Yes, there are high end dacs, streamers, that can "enhance" the sound with a dsp engine that’s hidden away. You wouldn’t quite know unless you had the engineering/software background, knew how to dig.

The manufacturer won’t tell you about it because the guy who’s buying it thinks he’s getting a purist piece. In reality, the purist piece won't sound as good, make his jaw drop, etc like the enhanced piece. 

Processing the signal is what streamers do. Just like “smart TVs” but just sound.    The nature of the picture on smart TVs tends to be somewhat different and discernible when compared  in each case.  
 

Anything is possible with digital including house sounds or anything a vendor determines might give their product a one up on others.  The end result is what matters more than how it’s achieved. Do you like it or not?  Plus it’s a black box.  You hear the output but how that is processed is not necessarily advertised.  Vendors have been associated with “house sounds” since day one.   Digital just opens up new possibilities compared to say a phono cart designed to deliver a particular kind of sound when used properly.  

If interested it’s  a fair question to a vendor though exactly what kind of signal processing their product does  to get best results either by default or otherwise.  
 

It’s more about “how” than “if”. 
 

I have a background in signal processing. If it were me I know I would be fully leveraging various DSP tricks in my product in order to get best results.  What matters is if the DSP is applied wisely or not.   The resulting sound will tell. 
 

I think that there are manufacturers who work to reveal and others who work to enhance. My guess would be that the better streamer manufacturers seek to reveal.

“Are streamers digitally enhanced?”

In simple terms - YES!  

“But what do we know about how streamers or DACs are processing the signal? Is the goal purity or beauty?”

The answer lies in the intersection of engineering, philosophy, and subjectivity in audio. That’s why high end streamers like Pulse embodies their designer’s intention and vision for listener’s values.

Folks like your engineer friend often approaching it from a strictly data-transfer mindset, not an audio-performance perspective. Offering an explanation to a skeptic is like debating color depth with someone looking at a JPEG on a CRT monitor.

That said, for the rare skeptic who’s open-minded, one well-controlled listening session can say more than any technical spec sheet. Once someone hears how a streamer like the Pulse can open up spatial and harmonic information without adding glare or artificial edge, it’s hard to go back. 

I don't see how a streamer could possibly alter the harmonics or tonality/tonal balance of an audio system. It is only the apps loaded into streamers that could possibly affect one of these two parameters of sound quality, music players such as Roon, Qobuz, Tidal, etc. and DSP engines.  To claim otherwise  is arguing that digital packets of 0 and 1's have inherent tonality/ timbre. I  also don't  see how any music player app or dsp engine can change timbre, timbre/harmonics live solely in the analog realm. On the other hand I do agree the apps and dsp engines could change the tonal balance.

Streamers sole impacts are in resolution, transparency and presentation, this why minimizing noise and providing highest quality clocking is so important. When people are claiming their streamer adds some character to the sound they are conflating the contributions of other parts of their audio system with the streamer. A high quality streamer simply allows the 'color' of the rest of the system to shine through. The color, harmonic texture comes solely from the analog components of system, the only digital component that can alter this is the analog output stage in a dac. No network or digital data processing component has a 'sound.'