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Yes, you had it right the first time. Topaz books are made the same way as other e-books (well, not exactly the same way, but you know what I mean). First they assemble the parts into a working book file, then they add the DRM afterwards.
The old Skindle tools for stripping used to remove the DRM from Topaz books, but leave them otherwise intact, so you could go load them up upon another Kindle/app.
But the stripped Topaz files are incompatible with the Topaz conversion tools and no other reader/app can read them, so there's not really much use for them unless you've got a lot of Topaz books, several Kindles/K4Apps, and don't want to waste time in the Archives re-sending all your books to each.
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