[NiHaoMike]

In a digital multimeter, there's already an ADC and no need to convert it back to analog. It is possible to do it in analog and I actually have opened up an old Fluke that worked that way, but that was back when computing power was expensive. Now, it's cheaper to do it in digital given you need the result in digital.

There's a good reason the cheap Kill-a-Watts use DSP, as do the somewhat better Watts Up meters and even the top of the line Gossens, Flukes, and Agilents. At the low frequencies multimeters operate at, the "DSP" doesn't even have to be a proper DSP. A cheap 8 or 16 bit microcontroller (with clever programming) does the trick. ADCs that operate in the 10s of kHz sampling rates are dirt cheap thanks to their extensive use in audio applications.