Line ending normalization

I'm having a hard time finding the language in the 1.0 spec [1] which 
would make it clear whether the line ending normalization which XML 
processors must perform (more precisely, "must behave as if it 
normalized all line breaks ...") happens before or after the replacement 
of character entities.  In other words, for the following document:

<a>x&#x000d;&#x000a;y</a>

is the value returned by the XML parser for the text content of element 
e "x\r\ny" or "x\ny"?

Could someone point to the language which would address this timing 
question?  And do the major XML parser implementations handle this issue 
consistently?


Apologies if this has already been dealt with on the mailing list.  I 
tried using the search interface, but got the error message "The 
requested URL /cgi-bin/htsearch was not found on this server."

[1] http://www.w3.org/TR/2008/REC-xml-20081126/

-- 
Bob Kline
http://www.rksystems.com
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