Not a dumb question at all, but if I am reading your statement correctly, there is a flaw. Correct me if I am wrong, but you want to use your dro as the feedback to the cnc program.
It will work, EXCEPT for the problem of backlash. If your using this for feedback to servos, they always work on a "following error" and backlash between the driven element (the lead screw) and the encoder (dro in this case) will cause the system to continually hunt and may go into distructive ossicilation.
As the saying goes, "been there, done that".
Sorry to burst your bubble.