diff --git a/pkg/rtc/participant.go b/pkg/rtc/participant.go
index 3c45151aa..7b76a3768 100644
--- a/pkg/rtc/participant.go
+++ b/pkg/rtc/participant.go
@@ -211,7 +211,7 @@ type ParticipantImpl struct {
 	onStateChange        func(p types.LocalParticipant, state livekit.ParticipantInfo_State)
 	onMigrateStateChange func(p types.LocalParticipant, migrateState types.MigrateState)
 	onParticipantUpdate  func(types.LocalParticipant)
-	onDataPacket         func(types.LocalParticipant, *livekit.DataPacket)
+	onDataPacket         func(types.LocalParticipant, livekit.DataPacket_Kind, *livekit.DataPacket)
 
 	migrateState atomic.Value // types.MigrateState
 
@@ -625,7 +625,7 @@ func (p *ParticipantImpl) OnParticipantUpdate(callback func(types.LocalParticipa
 	p.lock.Unlock()
 }
 
-func (p *ParticipantImpl) OnDataPacket(callback func(types.LocalParticipant, *livekit.DataPacket)) {
+func (p *ParticipantImpl) OnDataPacket(callback func(types.LocalParticipant, livekit.DataPacket_Kind, *livekit.DataPacket)) {
 	p.lock.Lock()
 	p.onDataPacket = callback
 	p.lock.Unlock()
@@ -1472,8 +1472,8 @@ func (p *ParticipantImpl) onDataMessage(kind livekit.DataPacket_Kind, data []byt
 
 	p.dataChannelStats.AddBytes(uint64(len(data)), false)
 
-	dp := livekit.DataPacket{}
-	if err := proto.Unmarshal(data, &dp); err != nil {
+	dp := &livekit.DataPacket{}
+	if err := proto.Unmarshal(data, dp); err != nil {
 		p.pubLogger.Warnw("could not parse data packet", err)
 		return
 	}
@@ -1481,6 +1481,12 @@ func (p *ParticipantImpl) onDataMessage(kind livekit.DataPacket_Kind, data []byt
 	// trust the channel that it came in as the source of truth
 	dp.Kind = kind
 
+	if p.Hidden() {
+		dp.ParticipantIdentity = ""
+	} else {
+		dp.ParticipantIdentity = string(p.params.Identity)
+	}
+
 	// only forward on user payloads
 	switch payload := dp.Value.(type) {
 	case *livekit.DataPacket_User:
@@ -1488,14 +1494,34 @@ func (p *ParticipantImpl) onDataMessage(kind livekit.DataPacket_Kind, data []byt
 		onDataPacket := p.onDataPacket
 		p.lock.RUnlock()
 		if onDataPacket != nil {
+			u := payload.User
 			if p.Hidden() {
-				payload.User.ParticipantSid = ""
-				payload.User.ParticipantIdentity = ""
+				u.ParticipantSid = ""
+				u.ParticipantIdentity = ""
 			} else {
-				payload.User.ParticipantSid = string(p.params.SID)
-				payload.User.ParticipantIdentity = string(p.params.Identity)
+				u.ParticipantSid = string(p.params.SID)
+				u.ParticipantIdentity = string(p.params.Identity)
+			}
+			if dp.ParticipantIdentity != "" {
+				u.ParticipantIdentity = dp.ParticipantIdentity
+			} else {
+				dp.ParticipantIdentity = u.ParticipantIdentity
+			}
+			if len(dp.DestinationIdentities) != 0 {
+				u.DestinationIdentities = dp.DestinationIdentities
+			} else {
+				dp.DestinationIdentities = u.DestinationIdentities
+			}
+			onDataPacket(p, kind, dp)
+		}
+	case *livekit.DataPacket_SipDtmf:
+		if p.grants.GetParticipantKind() == livekit.ParticipantInfo_SIP {
+			p.lock.RLock()
+			onDataPacket := p.onDataPacket
+			p.lock.RUnlock()
+			if onDataPacket != nil {
+				onDataPacket(p, kind, dp)
 			}
-			onDataPacket(p, &dp)
 		}
 	default:
 		p.pubLogger.Warnw("received unsupported data packet", nil, "payload", payload)
@@ -2474,19 +2500,19 @@ func codecsFromMediaDescription(m *sdp.MediaDescription) (out []sdp.Codec, err e
 	return out, nil
 }
 
-func (p *ParticipantImpl) SendDataPacket(dp *livekit.DataPacket, data []byte) error {
+func (p *ParticipantImpl) SendDataPacket(kind livekit.DataPacket_Kind, encoded []byte) error {
 	if p.State() != livekit.ParticipantInfo_ACTIVE {
 		return ErrDataChannelUnavailable
 	}
 
-	err := p.TransportManager.SendDataPacket(dp, data)
+	err := p.TransportManager.SendDataPacket(kind, encoded)
 	if err != nil {
 		if (errors.Is(err, sctp.ErrStreamClosed) || errors.Is(err, io.ErrClosedPipe)) && p.params.ReconnectOnDataChannelError {
 			p.params.Logger.Infow("issuing full reconnect on data channel error", "error", err)
 			p.IssueFullReconnect(types.ParticipantCloseReasonDataChannelError)
 		}
 	} else {
-		p.dataChannelStats.AddBytes(uint64(len(data)), true)
+		p.dataChannelStats.AddBytes(uint64(len(encoded)), true)
 	}
 	return err
 }
diff --git a/pkg/rtc/room.go b/pkg/rtc/room.go
index 02343080f..5cfe8f5da 100644
--- a/pkg/rtc/room.go
+++ b/pkg/rtc/room.go
@@ -20,6 +20,7 @@ import (
 	"fmt"
 	"io"
 	"math"
+	"slices"
 	"sort"
 	"strings"
 	"sync"
@@ -820,14 +821,8 @@ func (r *Room) OnParticipantChanged(f func(participant types.LocalParticipant))
 	r.onParticipantChanged = f
 }
 
-func (r *Room) SendDataPacket(up *livekit.UserPacket, kind livekit.DataPacket_Kind) {
-	dp := &livekit.DataPacket{
-		Kind: kind,
-		Value: &livekit.DataPacket_User{
-			User: up,
-		},
-	}
-	r.onDataPacket(nil, dp)
+func (r *Room) SendDataPacket(dp *livekit.DataPacket, kind livekit.DataPacket_Kind) {
+	r.onDataPacket(nil, kind, dp)
 }
 
 func (r *Room) SetMetadata(metadata string) <-chan struct{} {
@@ -1085,8 +1080,8 @@ func (r *Room) onParticipantUpdate(p types.LocalParticipant) {
 	}
 }
 
-func (r *Room) onDataPacket(source types.LocalParticipant, dp *livekit.DataPacket) {
-	BroadcastDataPacketForRoom(r, source, dp, r.Logger)
+func (r *Room) onDataPacket(source types.LocalParticipant, kind livekit.DataPacket_Kind, dp *livekit.DataPacket) {
+	BroadcastDataPacketForRoom(r, source, kind, dp, r.Logger)
 }
 
 func (r *Room) subscribeToExistingTracks(p types.LocalParticipant) {
@@ -1171,33 +1166,6 @@ func (r *Room) sendParticipantUpdates(updates []*participantUpdate) {
 	}
 }
 
-// for protocol 2, send all active speakers
-func (r *Room) sendActiveSpeakers(speakers []*livekit.SpeakerInfo) {
-	dp := &livekit.DataPacket{
-		Kind: livekit.DataPacket_LOSSY,
-		Value: &livekit.DataPacket_Speaker{
-			Speaker: &livekit.ActiveSpeakerUpdate{
-				Speakers: speakers,
-			},
-		},
-	}
-
-	var dpData []byte
-	for _, p := range r.GetParticipants() {
-		if p.ProtocolVersion().HandlesDataPackets() && !p.ProtocolVersion().SupportsSpeakerChanged() {
-			if dpData == nil {
-				var err error
-				dpData, err = proto.Marshal(dp)
-				if err != nil {
-					r.Logger.Errorw("failed to marshal ActiveSpeaker data packet", err)
-					return
-				}
-			}
-			_ = p.SendDataPacket(dp, dpData)
-		}
-	}
-}
-
 // for protocol 3, send only changed updates
 func (r *Room) sendSpeakerChanges(speakers []*livekit.SpeakerInfo) {
 	for _, p := range r.GetParticipants() {
@@ -1346,7 +1314,6 @@ func (r *Room) audioUpdateWorker() {
 
 		// see if an update is needed
 		if len(changedSpeakers) > 0 {
-			r.sendActiveSpeakers(activeSpeakers)
 			r.sendSpeakerChanges(changedSpeakers)
 		}
 
@@ -1495,18 +1462,34 @@ func (r *Room) DebugInfo() map[string]interface{} {
 
 // ------------------------------------------------------------
 
-func BroadcastDataPacketForRoom(r types.Room, source types.LocalParticipant, dp *livekit.DataPacket, logger logger.Logger) {
+func BroadcastDataPacketForRoom(r types.Room, source types.LocalParticipant, kind livekit.DataPacket_Kind, dp *livekit.DataPacket, logger logger.Logger) {
+	dp.Kind = kind // backward compatibility
 	dest := dp.GetUser().GetDestinationSids()
-	var dpData []byte
-	destIdentities := dp.GetUser().GetDestinationIdentities()
+	if u := dp.GetUser(); u != nil {
+		if len(dp.DestinationIdentities) == 0 {
+			dp.DestinationIdentities = u.DestinationIdentities
+		} else {
+			u.DestinationIdentities = dp.DestinationIdentities
+		}
+		if dp.ParticipantIdentity != "" {
+			u.ParticipantIdentity = dp.ParticipantIdentity
+		} else {
+			dp.ParticipantIdentity = u.ParticipantIdentity
+		}
+	}
+	destIdentities := dp.DestinationIdentities
 
 	participants := r.GetLocalParticipants()
-	capacity := len(dest)
+	capacity := len(destIdentities)
+	if capacity == 0 {
+		capacity = len(dest)
+	}
 	if capacity == 0 {
 		capacity = len(participants)
 	}
 	destParticipants := make([]types.LocalParticipant, 0, capacity)
 
+	var dpData []byte
 	for _, op := range participants {
 		if op.State() != livekit.ParticipantInfo_ACTIVE {
 			continue
@@ -1515,20 +1498,7 @@ func BroadcastDataPacketForRoom(r types.Room, source types.LocalParticipant, dp
 			continue
 		}
 		if len(dest) > 0 || len(destIdentities) > 0 {
-			found := false
-			for _, dID := range dest {
-				if op.ID() == livekit.ParticipantID(dID) {
-					found = true
-					break
-				}
-			}
-			for _, dIdentity := range destIdentities {
-				if op.Identity() == livekit.ParticipantIdentity(dIdentity) {
-					found = true
-					break
-				}
-			}
-			if !found {
+			if !slices.Contains(dest, string(op.ID())) && !slices.Contains(destIdentities, string(op.Identity())) {
 				continue
 			}
 		}
@@ -1544,7 +1514,7 @@ func BroadcastDataPacketForRoom(r types.Room, source types.LocalParticipant, dp
 	}
 
 	utils.ParallelExec(destParticipants, dataForwardLoadBalanceThreshold, 1, func(op types.LocalParticipant) {
-		err := op.SendDataPacket(dp, dpData)
+		err := op.SendDataPacket(kind, dpData)
 		if err != nil && !errors.Is(err, io.ErrClosedPipe) && !errors.Is(err, sctp.ErrStreamClosed) &&
 			!errors.Is(err, ErrTransportFailure) && !errors.Is(err, ErrDataChannelBufferFull) {
 			op.GetLogger().Infow("send data packet error", "error", err)
diff --git a/pkg/rtc/room_test.go b/pkg/rtc/room_test.go
index ea09a91d0..c73b5fa5c 100644
--- a/pkg/rtc/room_test.go
+++ b/pkg/rtc/room_test.go
@@ -22,10 +22,11 @@ import (
 	"github.com/stretchr/testify/require"
 	"google.golang.org/protobuf/proto"
 
-	"github.com/livekit/livekit-server/version"
 	"github.com/livekit/protocol/livekit"
 	"github.com/livekit/protocol/webhook"
 
+	"github.com/livekit/livekit-server/version"
+
 	"github.com/livekit/livekit-server/pkg/config"
 	"github.com/livekit/livekit-server/pkg/rtc/types"
 	"github.com/livekit/livekit-server/pkg/rtc/types/typesfakes"
@@ -569,65 +570,126 @@ func TestActiveSpeakers(t *testing.T) {
 func TestDataChannel(t *testing.T) {
 	t.Parallel()
 
-	t.Run("participants should receive data", func(t *testing.T) {
-		rm := newRoomWithParticipants(t, testRoomOpts{num: 3})
-		defer rm.Close(types.ParticipantCloseReasonNone)
-		participants := rm.GetParticipants()
-		p := participants[0].(*typesfakes.FakeLocalParticipant)
+	const (
+		curAPI = iota
+		legacySID
+		legacyIdentity
+	)
+	modes := []int{
+		curAPI, legacySID, legacyIdentity,
+	}
+	modeNames := []string{
+		"cur", "legacy sid", "legacy identity",
+	}
 
-		packet := livekit.DataPacket{
-			Kind: livekit.DataPacket_RELIABLE,
-			Value: &livekit.DataPacket_User{
-				User: &livekit.UserPacket{
-					ParticipantSid: string(p.ID()),
-					Payload:        []byte("message.."),
-				},
-			},
+	setSource := func(mode int, dp *livekit.DataPacket, p types.LocalParticipant) {
+		switch mode {
+		case curAPI:
+			dp.ParticipantIdentity = string(p.Identity())
+		case legacySID:
+			dp.GetUser().ParticipantSid = string(p.ID())
+		case legacyIdentity:
+			dp.GetUser().ParticipantIdentity = string(p.Identity())
 		}
-		p.OnDataPacketArgsForCall(0)(p, &packet)
+	}
+	setDest := func(mode int, dp *livekit.DataPacket, p types.LocalParticipant) {
+		switch mode {
+		case curAPI:
+			dp.DestinationIdentities = []string{string(p.Identity())}
+		case legacySID:
+			dp.GetUser().DestinationSids = []string{string(p.ID())}
+		case legacyIdentity:
+			dp.GetUser().DestinationIdentities = []string{string(p.Identity())}
+		}
+	}
 
-		// ensure everyone has received the packet
-		for _, op := range participants {
-			fp := op.(*typesfakes.FakeLocalParticipant)
-			if fp == p {
-				require.Zero(t, fp.SendDataPacketCallCount())
-				continue
-			}
-			require.Equal(t, 1, fp.SendDataPacketCallCount())
-			dp, _ := fp.SendDataPacketArgsForCall(0)
-			require.Equal(t, packet.Value, dp.Value)
+	t.Run("participants should receive data", func(t *testing.T) {
+		for _, mode := range modes {
+			mode := mode
+			t.Run(modeNames[mode], func(t *testing.T) {
+				rm := newRoomWithParticipants(t, testRoomOpts{num: 3})
+				defer rm.Close(types.ParticipantCloseReasonNone)
+				participants := rm.GetParticipants()
+				p := participants[0].(*typesfakes.FakeLocalParticipant)
+
+				packet := &livekit.DataPacket{
+					Kind: livekit.DataPacket_RELIABLE,
+					Value: &livekit.DataPacket_User{
+						User: &livekit.UserPacket{
+							Payload: []byte("message.."),
+						},
+					},
+				}
+				setSource(mode, packet, p)
+
+				packetExp := proto.Clone(packet).(*livekit.DataPacket)
+				if mode != legacySID {
+					packetExp.ParticipantIdentity = string(p.Identity())
+					packetExp.GetUser().ParticipantIdentity = string(p.Identity())
+				}
+
+				encoded, _ := proto.Marshal(packetExp)
+				p.OnDataPacketArgsForCall(0)(p, packet.Kind, packet)
+
+				// ensure everyone has received the packet
+				for _, op := range participants {
+					fp := op.(*typesfakes.FakeLocalParticipant)
+					if fp == p {
+						require.Zero(t, fp.SendDataPacketCallCount())
+						continue
+					}
+					require.Equal(t, 1, fp.SendDataPacketCallCount())
+					_, got := fp.SendDataPacketArgsForCall(0)
+					require.Equal(t, encoded, got)
+				}
+			})
 		}
 	})
 
 	t.Run("only one participant should receive the data", func(t *testing.T) {
-		rm := newRoomWithParticipants(t, testRoomOpts{num: 4})
-		defer rm.Close(types.ParticipantCloseReasonNone)
-		participants := rm.GetParticipants()
-		p := participants[0].(*typesfakes.FakeLocalParticipant)
-		p1 := participants[1].(*typesfakes.FakeLocalParticipant)
+		for _, mode := range modes {
+			mode := mode
+			t.Run(modeNames[mode], func(t *testing.T) {
+				rm := newRoomWithParticipants(t, testRoomOpts{num: 4})
+				defer rm.Close(types.ParticipantCloseReasonNone)
+				participants := rm.GetParticipants()
+				p := participants[0].(*typesfakes.FakeLocalParticipant)
+				p1 := participants[1].(*typesfakes.FakeLocalParticipant)
 
-		packet := livekit.DataPacket{
-			Kind: livekit.DataPacket_RELIABLE,
-			Value: &livekit.DataPacket_User{
-				User: &livekit.UserPacket{
-					ParticipantSid:  string(p.ID()),
-					Payload:         []byte("message to p1.."),
-					DestinationSids: []string{string(p1.ID())},
-				},
-			},
-		}
-		p.OnDataPacketArgsForCall(0)(p, &packet)
+				packet := &livekit.DataPacket{
+					Kind: livekit.DataPacket_RELIABLE,
+					Value: &livekit.DataPacket_User{
+						User: &livekit.UserPacket{
+							Payload: []byte("message to p1.."),
+						},
+					},
+				}
+				setSource(mode, packet, p)
+				setDest(mode, packet, p1)
 
-		// only p1 should receive the data
-		for _, op := range participants {
-			fp := op.(*typesfakes.FakeLocalParticipant)
-			if fp != p1 {
-				require.Zero(t, fp.SendDataPacketCallCount())
-			}
+				packetExp := proto.Clone(packet).(*livekit.DataPacket)
+				if mode != legacySID {
+					packetExp.ParticipantIdentity = string(p.Identity())
+					packetExp.GetUser().ParticipantIdentity = string(p.Identity())
+					packetExp.DestinationIdentities = []string{string(p1.Identity())}
+					packetExp.GetUser().DestinationIdentities = []string{string(p1.Identity())}
+				}
+
+				encoded, _ := proto.Marshal(packetExp)
+				p.OnDataPacketArgsForCall(0)(p, packet.Kind, packet)
+
+				// only p1 should receive the data
+				for _, op := range participants {
+					fp := op.(*typesfakes.FakeLocalParticipant)
+					if fp != p1 {
+						require.Zero(t, fp.SendDataPacketCallCount())
+					}
+				}
+				require.Equal(t, 1, p1.SendDataPacketCallCount())
+				_, got := p1.SendDataPacketArgsForCall(0)
+				require.Equal(t, encoded, got)
+			})
 		}
-		require.Equal(t, 1, p1.SendDataPacketCallCount())
-		dp, _ := p1.SendDataPacketArgsForCall(0)
-		require.Equal(t, packet.Value, dp.Value)
 	})
 
 	t.Run("publishing disallowed", func(t *testing.T) {
@@ -646,7 +708,7 @@ func TestDataChannel(t *testing.T) {
 			},
 		}
 		if p.CanPublishData() {
-			p.OnDataPacketArgsForCall(0)(p, &packet)
+			p.OnDataPacketArgsForCall(0)(p, packet.Kind, &packet)
 		}
 
 		// no one should've been sent packet
diff --git a/pkg/rtc/transport.go b/pkg/rtc/transport.go
index 29558ae47..1e0cd1a93 100644
--- a/pkg/rtc/transport.go
+++ b/pkg/rtc/transport.go
@@ -35,6 +35,13 @@ import (
 	"github.com/pkg/errors"
 	"go.uber.org/atomic"
 
+	lkinterceptor "github.com/livekit/mediatransportutil/pkg/interceptor"
+	lktwcc "github.com/livekit/mediatransportutil/pkg/twcc"
+	"github.com/livekit/protocol/livekit"
+	"github.com/livekit/protocol/logger"
+	"github.com/livekit/protocol/logger/pionlogger"
+	lksdp "github.com/livekit/protocol/sdp"
+
 	"github.com/livekit/livekit-server/pkg/config"
 	"github.com/livekit/livekit-server/pkg/rtc/transport"
 	"github.com/livekit/livekit-server/pkg/rtc/types"
@@ -46,12 +53,6 @@ import (
 	"github.com/livekit/livekit-server/pkg/telemetry/prometheus"
 	"github.com/livekit/livekit-server/pkg/utils"
 	sutils "github.com/livekit/livekit-server/pkg/utils"
-	lkinterceptor "github.com/livekit/mediatransportutil/pkg/interceptor"
-	lktwcc "github.com/livekit/mediatransportutil/pkg/twcc"
-	"github.com/livekit/protocol/livekit"
-	"github.com/livekit/protocol/logger"
-	"github.com/livekit/protocol/logger/pionlogger"
-	lksdp "github.com/livekit/protocol/sdp"
 )
 
 const (
@@ -799,16 +800,27 @@ func (t *PCTransport) CreateDataChannel(label string, dci *webrtc.DataChannelIni
 	if err != nil {
 		return err
 	}
+	var (
+		dcPtr   **webrtc.DataChannel
+		dcReady *bool
+	)
+	switch dc.Label() {
+	default:
+		// TODO: Appears that it's never called, so not sure what needs to be done here. We just keep the DC open?
+		//       Maybe just add "reliable" parameter instead of checking the label.
+		t.params.Logger.Warnw("unknown data channel label", nil, "label", dc.Label())
+		return nil
+	case ReliableDataChannel:
+		dcPtr = &t.reliableDC
+		dcReady = &t.reliableDCOpened
+	case LossyDataChannel:
+		dcPtr = &t.lossyDC
+		dcReady = &t.lossyDCOpened
+	}
 
 	dcReadyHandler := func() {
 		t.lock.Lock()
-		switch dc.Label() {
-		case ReliableDataChannel:
-			t.reliableDCOpened = true
-
-		case LossyDataChannel:
-			t.lossyDCOpened = true
-		}
+		*dcReady = true
 		t.lock.Unlock()
 		t.params.Logger.Debugw(dc.Label() + " data channel open")
 
@@ -826,30 +838,15 @@ func (t *PCTransport) CreateDataChannel(label string, dci *webrtc.DataChannelIni
 	}
 
 	t.lock.Lock()
-	switch dc.Label() {
-	case ReliableDataChannel:
-		t.reliableDC = dc
-		if t.params.DirectionConfig.StrictACKs {
-			t.reliableDC.OnOpen(dcReadyHandler)
-		} else {
-			t.reliableDC.OnDial(dcReadyHandler)
-		}
-		t.reliableDC.OnClose(dcCloseHandler)
-		t.reliableDC.OnError(dcErrorHandler)
-	case LossyDataChannel:
-		t.lossyDC = dc
-		if t.params.DirectionConfig.StrictACKs {
-			t.lossyDC.OnOpen(dcReadyHandler)
-		} else {
-			t.lossyDC.OnDial(dcReadyHandler)
-		}
-		t.lossyDC.OnClose(dcCloseHandler)
-		t.lossyDC.OnError(dcErrorHandler)
-	default:
-		t.params.Logger.Warnw("unknown data channel label", nil, "label", dc.Label())
+	defer t.lock.Unlock()
+	*dcPtr = dc
+	if t.params.DirectionConfig.StrictACKs {
+		dc.OnOpen(dcReadyHandler)
+	} else {
+		dc.OnDial(dcReadyHandler)
 	}
-	t.lock.Unlock()
-
+	dc.OnClose(dcCloseHandler)
+	dc.OnError(dcErrorHandler)
 	return nil
 }
 
@@ -903,10 +900,10 @@ func (t *PCTransport) WriteRTCP(pkts []rtcp.Packet) error {
 	return t.pc.WriteRTCP(pkts)
 }
 
-func (t *PCTransport) SendDataPacket(dp *livekit.DataPacket, data []byte) error {
+func (t *PCTransport) SendDataPacket(kind livekit.DataPacket_Kind, encoded []byte) error {
 	var dc *webrtc.DataChannel
 	t.lock.RLock()
-	if dp.Kind == livekit.DataPacket_RELIABLE {
+	if kind == livekit.DataPacket_RELIABLE {
 		dc = t.reliableDC
 	} else {
 		dc = t.lossyDC
@@ -925,7 +922,7 @@ func (t *PCTransport) SendDataPacket(dp *livekit.DataPacket, data []byte) error
 		return ErrDataChannelBufferFull
 	}
 
-	return dc.Send(data)
+	return dc.Send(encoded)
 }
 
 func (t *PCTransport) Close() {
diff --git a/pkg/rtc/transportmanager.go b/pkg/rtc/transportmanager.go
index cd1b23289..049b76a5e 100644
--- a/pkg/rtc/transportmanager.go
+++ b/pkg/rtc/transportmanager.go
@@ -28,14 +28,15 @@ import (
 	"go.uber.org/atomic"
 	"google.golang.org/protobuf/proto"
 
+	"github.com/livekit/mediatransportutil/pkg/twcc"
+	"github.com/livekit/protocol/livekit"
+	"github.com/livekit/protocol/logger"
+
 	"github.com/livekit/livekit-server/pkg/config"
 	"github.com/livekit/livekit-server/pkg/rtc/transport"
 	"github.com/livekit/livekit-server/pkg/rtc/types"
 	"github.com/livekit/livekit-server/pkg/sfu"
 	"github.com/livekit/livekit-server/pkg/sfu/pacer"
-	"github.com/livekit/mediatransportutil/pkg/twcc"
-	"github.com/livekit/protocol/livekit"
-	"github.com/livekit/protocol/logger"
 )
 
 const (
@@ -240,9 +241,9 @@ func (t *TransportManager) RemoveSubscribedTrack(subTrack types.SubscribedTrack)
 	t.subscriber.RemoveTrackFromStreamAllocator(subTrack)
 }
 
-func (t *TransportManager) SendDataPacket(dp *livekit.DataPacket, data []byte) error {
+func (t *TransportManager) SendDataPacket(kind livekit.DataPacket_Kind, encoded []byte) error {
 	// downstream data is sent via primary peer connection
-	return t.getTransport(true).SendDataPacket(dp, data)
+	return t.getTransport(true).SendDataPacket(kind, encoded)
 }
 
 func (t *TransportManager) createDataChannelsForSubscriber(pendingDataChannels []*livekit.DataChannelInfo) error {
diff --git a/pkg/rtc/types/interfaces.go b/pkg/rtc/types/interfaces.go
index e4e6b61d3..b0943d4f4 100644
--- a/pkg/rtc/types/interfaces.go
+++ b/pkg/rtc/types/interfaces.go
@@ -365,7 +365,7 @@ type LocalParticipant interface {
 	SendJoinResponse(joinResponse *livekit.JoinResponse) error
 	SendParticipantUpdate(participants []*livekit.ParticipantInfo) error
 	SendSpeakerUpdate(speakers []*livekit.SpeakerInfo, force bool) error
-	SendDataPacket(packet *livekit.DataPacket, data []byte) error
+	SendDataPacket(kind livekit.DataPacket_Kind, encoded []byte) error
 	SendRoomUpdate(room *livekit.Room) error
 	SendConnectionQualityUpdate(update *livekit.ConnectionQualityUpdate) error
 	SubscriptionPermissionUpdate(publisherID livekit.ParticipantID, trackID livekit.TrackID, allowed bool)
@@ -384,7 +384,7 @@ type LocalParticipant interface {
 	OnTrackUnpublished(callback func(LocalParticipant, MediaTrack))
 	// OnParticipantUpdate - metadata or permission is updated
 	OnParticipantUpdate(callback func(LocalParticipant))
-	OnDataPacket(callback func(LocalParticipant, *livekit.DataPacket))
+	OnDataPacket(callback func(LocalParticipant, livekit.DataPacket_Kind, *livekit.DataPacket))
 	OnSubscribeStatusChanged(fn func(publisherID livekit.ParticipantID, subscribed bool))
 	OnClose(callback func(LocalParticipant))
 	OnClaimsChanged(callback func(LocalParticipant))
diff --git a/pkg/rtc/types/typesfakes/fake_local_participant.go b/pkg/rtc/types/typesfakes/fake_local_participant.go
index 464f4009c..37c03ef10 100644
--- a/pkg/rtc/types/typesfakes/fake_local_participant.go
+++ b/pkg/rtc/types/typesfakes/fake_local_participant.go
@@ -571,10 +571,10 @@ type FakeLocalParticipant struct {
 	onCloseArgsForCall []struct {
 		arg1 func(types.LocalParticipant)
 	}
-	OnDataPacketStub        func(func(types.LocalParticipant, *livekit.DataPacket))
+	OnDataPacketStub        func(func(types.LocalParticipant, livekit.DataPacket_Kind, *livekit.DataPacket))
 	onDataPacketMutex       sync.RWMutex
 	onDataPacketArgsForCall []struct {
-		arg1 func(types.LocalParticipant, *livekit.DataPacket)
+		arg1 func(types.LocalParticipant, livekit.DataPacket_Kind, *livekit.DataPacket)
 	}
 	OnICEConfigChangedStub        func(func(participant types.LocalParticipant, iceConfig *livekit.ICEConfig))
 	onICEConfigChangedMutex       sync.RWMutex
@@ -660,10 +660,10 @@ type FakeLocalParticipant struct {
 	sendConnectionQualityUpdateReturnsOnCall map[int]struct {
 		result1 error
 	}
-	SendDataPacketStub        func(*livekit.DataPacket, []byte) error
+	SendDataPacketStub        func(livekit.DataPacket_Kind, []byte) error
 	sendDataPacketMutex       sync.RWMutex
 	sendDataPacketArgsForCall []struct {
-		arg1 *livekit.DataPacket
+		arg1 livekit.DataPacket_Kind
 		arg2 []byte
 	}
 	sendDataPacketReturns struct {
@@ -3932,10 +3932,10 @@ func (fake *FakeLocalParticipant) OnCloseArgsForCall(i int) func(types.LocalPart
 	return argsForCall.arg1
 }
 
-func (fake *FakeLocalParticipant) OnDataPacket(arg1 func(types.LocalParticipant, *livekit.DataPacket)) {
+func (fake *FakeLocalParticipant) OnDataPacket(arg1 func(types.LocalParticipant, livekit.DataPacket_Kind, *livekit.DataPacket)) {
 	fake.onDataPacketMutex.Lock()
 	fake.onDataPacketArgsForCall = append(fake.onDataPacketArgsForCall, struct {
-		arg1 func(types.LocalParticipant, *livekit.DataPacket)
+		arg1 func(types.LocalParticipant, livekit.DataPacket_Kind, *livekit.DataPacket)
 	}{arg1})
 	stub := fake.OnDataPacketStub
 	fake.recordInvocation("OnDataPacket", []interface{}{arg1})
@@ -3951,13 +3951,13 @@ func (fake *FakeLocalParticipant) OnDataPacketCallCount() int {
 	return len(fake.onDataPacketArgsForCall)
 }
 
-func (fake *FakeLocalParticipant) OnDataPacketCalls(stub func(func(types.LocalParticipant, *livekit.DataPacket))) {
+func (fake *FakeLocalParticipant) OnDataPacketCalls(stub func(func(types.LocalParticipant, livekit.DataPacket_Kind, *livekit.DataPacket))) {
 	fake.onDataPacketMutex.Lock()
 	defer fake.onDataPacketMutex.Unlock()
 	fake.OnDataPacketStub = stub
 }
 
-func (fake *FakeLocalParticipant) OnDataPacketArgsForCall(i int) func(types.LocalParticipant, *livekit.DataPacket) {
+func (fake *FakeLocalParticipant) OnDataPacketArgsForCall(i int) func(types.LocalParticipant, livekit.DataPacket_Kind, *livekit.DataPacket) {
 	fake.onDataPacketMutex.RLock()
 	defer fake.onDataPacketMutex.RUnlock()
 	argsForCall := fake.onDataPacketArgsForCall[i]
@@ -4461,7 +4461,7 @@ func (fake *FakeLocalParticipant) SendConnectionQualityUpdateReturnsOnCall(i int
 	}{result1}
 }
 
-func (fake *FakeLocalParticipant) SendDataPacket(arg1 *livekit.DataPacket, arg2 []byte) error {
+func (fake *FakeLocalParticipant) SendDataPacket(arg1 livekit.DataPacket_Kind, arg2 []byte) error {
 	var arg2Copy []byte
 	if arg2 != nil {
 		arg2Copy = make([]byte, len(arg2))
@@ -4470,7 +4470,7 @@ func (fake *FakeLocalParticipant) SendDataPacket(arg1 *livekit.DataPacket, arg2
 	fake.sendDataPacketMutex.Lock()
 	ret, specificReturn := fake.sendDataPacketReturnsOnCall[len(fake.sendDataPacketArgsForCall)]
 	fake.sendDataPacketArgsForCall = append(fake.sendDataPacketArgsForCall, struct {
-		arg1 *livekit.DataPacket
+		arg1 livekit.DataPacket_Kind
 		arg2 []byte
 	}{arg1, arg2Copy})
 	stub := fake.SendDataPacketStub
@@ -4492,13 +4492,13 @@ func (fake *FakeLocalParticipant) SendDataPacketCallCount() int {
 	return len(fake.sendDataPacketArgsForCall)
 }
 
-func (fake *FakeLocalParticipant) SendDataPacketCalls(stub func(*livekit.DataPacket, []byte) error) {
+func (fake *FakeLocalParticipant) SendDataPacketCalls(stub func(livekit.DataPacket_Kind, []byte) error) {
 	fake.sendDataPacketMutex.Lock()
 	defer fake.sendDataPacketMutex.Unlock()
 	fake.SendDataPacketStub = stub
 }
 
-func (fake *FakeLocalParticipant) SendDataPacketArgsForCall(i int) (*livekit.DataPacket, []byte) {
+func (fake *FakeLocalParticipant) SendDataPacketArgsForCall(i int) (livekit.DataPacket_Kind, []byte) {
 	fake.sendDataPacketMutex.RLock()
 	defer fake.sendDataPacketMutex.RUnlock()
 	argsForCall := fake.sendDataPacketArgsForCall[i]
diff --git a/pkg/service/roommanager.go b/pkg/service/roommanager.go
index 8c5aa60d5..96dd7036c 100644
--- a/pkg/service/roommanager.go
+++ b/pkg/service/roommanager.go
@@ -24,8 +24,6 @@ import (
 	"github.com/pkg/errors"
 	"golang.org/x/exp/maps"
 
-	"github.com/livekit/livekit-server/pkg/telemetry/prometheus"
-	"github.com/livekit/livekit-server/version"
 	"github.com/livekit/mediatransportutil/pkg/rtcconfig"
 	"github.com/livekit/protocol/auth"
 	"github.com/livekit/protocol/livekit"
@@ -41,6 +39,8 @@ import (
 	"github.com/livekit/livekit-server/pkg/rtc"
 	"github.com/livekit/livekit-server/pkg/rtc/types"
 	"github.com/livekit/livekit-server/pkg/telemetry"
+	"github.com/livekit/livekit-server/pkg/telemetry/prometheus"
+	"github.com/livekit/livekit-server/version"
 )
 
 const (
@@ -753,13 +753,18 @@ func (r *RoomManager) SendData(ctx context.Context, req *livekit.SendDataRequest
 	}
 
 	room.Logger.Debugw("api send data", "size", len(req.Data))
-	up := &livekit.UserPacket{
-		Payload:               req.Data,
-		DestinationSids:       req.DestinationSids,
+	room.SendDataPacket(&livekit.DataPacket{
+		Kind:                  req.Kind,
 		DestinationIdentities: req.DestinationIdentities,
-		Topic:                 req.Topic,
-	}
-	room.SendDataPacket(up, req.Kind)
+		Value: &livekit.DataPacket_User{
+			User: &livekit.UserPacket{
+				Payload:               req.Data,
+				DestinationSids:       req.DestinationSids,
+				DestinationIdentities: req.DestinationIdentities,
+				Topic:                 req.Topic,
+			},
+		},
+	}, req.Kind)
 	return &livekit.SendDataResponse{}, nil
 }
 
diff --git a/test/client/client.go b/test/client/client.go
index e0be22e47..5d461a74a 100644
--- a/test/client/client.go
+++ b/test/client/client.go
@@ -679,19 +679,17 @@ func (c *RTCClient) PublishData(data []byte, kind livekit.DataPacket_Kind) error
 		return err
 	}
 
-	dp := &livekit.DataPacket{
+	dpData, err := proto.Marshal(&livekit.DataPacket{
 		Kind: kind,
 		Value: &livekit.DataPacket_User{
 			User: &livekit.UserPacket{Payload: data},
 		},
-	}
-
-	dpData, err := proto.Marshal(dp)
+	})
 	if err != nil {
 		return err
 	}
 
-	return c.publisher.SendDataPacket(dp, dpData)
+	return c.publisher.SendDataPacket(kind, dpData)
 }
 
 func (c *RTCClient) GetPublishedTrackIDs() []string {
@@ -732,12 +730,13 @@ func (c *RTCClient) ensurePublisherConnected() error {
 	}
 }
 
-func (c *RTCClient) handleDataMessage(_ livekit.DataPacket_Kind, data []byte) {
+func (c *RTCClient) handleDataMessage(kind livekit.DataPacket_Kind, data []byte) {
 	dp := &livekit.DataPacket{}
 	err := proto.Unmarshal(data, dp)
 	if err != nil {
 		return
 	}
+	dp.Kind = kind
 	if val, ok := dp.Value.(*livekit.DataPacket_User); ok {
 		if c.OnDataReceived != nil {
 			c.OnDataReceived(val.User.Payload, val.User.ParticipantSid)