If you pop the cover or valve assembly and look at the sand you'll see exactly that...a layer of DE on top of the sand. It penetrates down a little too and does blow out when you backwash. Also, there is nothing sacred about that 1 psi pressure rise. I suppose if you have a really clean pool you could add more DE and get even a closer approach to a true DE filter. I don't know if I started that 1 psi thing but that is what works well for me.
Al