diff --git a/packages/server/src/routes/dm.ts b/packages/server/src/routes/dm.ts
index aaccc9f5..eed954e2 100644
--- a/packages/server/src/routes/dm.ts
+++ b/packages/server/src/routes/dm.ts
@@ -1,7 +1,7 @@
 import type { FastifyInstance } from 'fastify';
 import { eq, and, or, desc, lt, inArray, isNull, sql } from 'drizzle-orm';
 import { getDb, schema } from '../db/index.js';
-import { authenticate, requireLocalUser } from '../utils/auth.js';
+import { authenticate } from '../utils/auth.js';
 import { generateSnowflake } from '../utils/snowflake.js';
 import { isDmMember } from '../utils/permissions.js';
 import { connectionManager } from '../ws/handler.js';
@@ -243,9 +243,8 @@ export function broadcastDmMessage(dmChannelId: string, message: DmMessageWithUs
 }
 
 export async function dmRoutes(app: FastifyInstance): Promise<void> {
-  // Centralized auth + federation gating for all DM routes
+  // Centralized auth for all DM routes
   app.addHook('preHandler', authenticate);
-  app.addHook('preHandler', requireLocalUser);
 
   // GET /api/dm - List user's DM channels
   app.get('/api/dm', async (request, reply) => {
diff --git a/packages/server/src/ws/events.ts b/packages/server/src/ws/events.ts
index 6691227b..47fea4e8 100644
--- a/packages/server/src/ws/events.ts
+++ b/packages/server/src/ws/events.ts
@@ -145,11 +145,12 @@ export function handleClientEvent(
 ): void {
   const type = event.type as string;
 
-  // Federation gating: federated users must use their home instance for DM operations
-  if (isFederated && type.startsWith('dm_')) {
+  // Federation gating: DM calls remain blocked for federated users (separate scope)
+  const DM_CALL_EVENTS = ['dm_call_start', 'dm_call_accept', 'dm_call_reject', 'dm_call_end'];
+  if (isFederated && DM_CALL_EVENTS.includes(type)) {
     connectionManager.sendToUser(userId, {
       type: 'error',
-      message: 'Federated users must use their home instance for DM operations',
+      message: 'Federated users cannot use DM calls on remote instances',
     });
     return;
   }
@@ -1278,7 +1279,6 @@ function handleChannelAck(event: Record<string, unknown>, userId: string, isFede
   if (spaceId) {
     if (!isMember(spaceId, userId)) return;
   } else {
-    if (isFederated) return;
     if (!isDmMember(channelId, userId)) return;
   }
 
@@ -1333,7 +1333,6 @@ function handleMarkUnread(event: Record<string, unknown>, userId: string, isFede
   if (spaceId) {
     if (!isMember(spaceId, userId)) return;
   } else {
-    if (isFederated) return;
     if (!isDmMember(channelId, userId)) return;
   }
 
diff --git a/packages/server/src/ws/handler.ts b/packages/server/src/ws/handler.ts
index 247b6902..43412e5e 100644
--- a/packages/server/src/ws/handler.ts
+++ b/packages/server/src/ws/handler.ts
@@ -1108,8 +1108,8 @@ function buildReadyPayload(userId: string): {
   // Store user's space IDs for broadcasting
   connectionManager.setUserSpaces(userId, spaceIds);
 
-  // Get DM channels — skip entirely for federated users (they get DMs from their home instance)
-  const dmMemberships = isFederated ? [] : db.select()
+  // Get DM channels
+  const dmMemberships = db.select()
     .from(schema.dmMembers)
     .where(and(
       eq(schema.dmMembers.userId, userId),
@@ -1198,6 +1198,7 @@ function buildReadyPayload(userId: string): {
 
       dmChannels.push({
         id: dmChannel.id,
+        federatedId: dmChannel.federatedId ?? null,
         ownerId: dmChannel.ownerId ?? null,
         createdAt: dmChannel.createdAt,
         members,
@@ -1214,6 +1215,11 @@ function buildReadyPayload(userId: string): {
 
   }
 
+  // Include DM channel IDs in the visible set for read state filtering
+  for (const dm of dmChannels) {
+    visibleChannelIdSet.add(dm.id);
+  }
+
   // Get Space Folders
   const folderRows = db.select()
     .from(schema.spaceFolders)