Hank, that order you you mentioned is how I would do it. Processor (need an outboard processor for DD/DTS, NOT decoding from the DVD player, etc!!!...I'd suggest inexpensive Acurus Act 3 used)). Then a subwoofer. (2 channels plus sub this way is very good still!), then maybe a center if you wish, then the rears, yes.
Good luck
Good luck