Hi Kent,

Dialog with encryption generate a session key that has to be stored securely
in the database. This requires a database master key.
If the dialog does not use encryption (encryption = off and no remote
service binding present), then no session key is generated and therefore no
master key is required.
It doesn't matter whether the dialog endpoints are local (even the same db)
or remote.

So your statement is correct, but it can be generalized to this: 'a database
master key is not required if and only a conversation is without encryption,
which is not the default'. The part about the instance/database does not
make any difference about the database master key requirement.