The DMC-1040 series used a Motorola 68331 CPU which, even by today's standards, is a fast controller. The encoder registers are capable of 8mHz quadrature input.
The only way I can see a speed problem is if one is trying to dump S/D pulses through the bus, or trying to use the Galil windows driver. The first approach reduces the board to a very expensive S/D-to-analog converter. The second is fruitless.
FWIW, numerous companies (mine included) attempted to build a PC-based CNC around the DMC-1040. The only one that succeeded was Camsoft. They did it with aggressive marketing, not with a functional product. Galil Basic was not a good platform for CNC, though it could be made to work in DOS. The windows driver was a joke because it used a windows timer and was not predictable. The board runs best as a standalone which is useless in CNC applications.
If you want to make use of the board you can always tie the S/D pins from the parallel port to the aux encoder inputs and then tell the axis' to follow them. Of course you will be back to the S/D-to-analog converter thing and you still won't have a closed loop between the drives and control, nor a decent homing sequence. Might as well use Geckos or Rutex.