I think you misunderstood my question

I don't think I did :) I explained how the given template example unravels in both perl and tt2 terms

does that mean the contents of a () tag aren't subject to any handlers?

I don't understand what you're asking :)

Based on his actual proof of concept (both old, new) "(DB)" "DB" is the name of plugin, its perl code, either ...DB.aXMLpl or ...DB.pm

Since (DB) has no () children, it is processed first, as a complete unit

Its responsible for processing all tags contained within as a template

Or that upon return of the () tag handler, any tags in the return are handled? Other?

Lets try another , shorter example

(Foo)
 <Fruit>Apples</Fruit>
 (Bar)
   <pants>red</pants><d>varyable</d>
 (/Bar)
(/Foo)
[download]

That would be functionally equivalent to this perl code

return $Foo->(
 '<Fruit>Apples</Fruit>'
 .$Bar->('<pants>red</pants><d>varyable</d>')
);
[download]

Like chromatic said, its basically scheme

Am I closer now?