Sri, spot on, it returns it between the inlet compressor and the AMM. And also most dump valves work on pressure differantial and not just forcing past a spring. Forcing through a spring will cause a pressure spike before it happens which isn't good on a high boost car, you also still have to force past the spring so still have a restriction anyway. And thridly if you're running highish boost it will just leak past the valve anyway.
There are special dump valves availiable that get round the AMM problem, i don't know how they work, but they are usually the only ones that you can fit to very advanced turbo'ed cars (Evo's, Subaru's etc) without problems.