I tested DLSS 1080p, and is awful looking, totally blured/washed detail image (maximun quality) and at least in my game configuration the performance improvement is negligible. Probably in higher resolutions there is better results. Not CO fault.
many folks dont have an understanding as to what DLSS is doing...but you have the jist of it in your post here...HIGHER RES BETTER RESULTS!!
At 1080 you shouldnt be using DLSS if you want any kind of crispy image
DLSS is for 1440 and above (thats my opinion but its a valid one)
DLSS takes a lower resolution image and UPSCALES it to make it look like the res you are shooting for
Each of the settings for DLSS takes your INPUT RESOLUTION down by the percentage listed below
Quality - 66.6% (2/3) per axis, 45% resolution.
Balanced - 58% per axis, 33% resolution
Performance - 50% per axis, 25% resolution.
Ultra Performance - 33% (1/3) per axis, 11% resolution.
THEN using AI and the actual hardware in your NVIDIA 2000 series or higher GPU it will UPSCALE that image and apply filters and other tricks to make it LOOK close to 4k or 1440
BUT
and this is the point and why 1080 dlss will look terrible almost always....the less INPUT resolution you have the LESS there is for the algo to work with...and 1080 on QUALITY is only really 720 that they then upscale 1080 on perf is like 480p .... as you get more pixels the tradeoffs are lessened....
hope that helps some folks understanding what is happeneing with dlss
all numbers approximate and based on a number of variables but this gives you an idea of why 1080 dlss isnt looking good...
at 1080 use TAA or MSAA imho