No need to XREF it - am sure that is just a legacy thing to keep the Autocad users happy.
Add the DWG with the 'Drawing' tool.
Then you can select and explode into lines if need be.
You can keep the DWG layers or have everything exploded into the one layer that you place the DWG in.
One of the forum moderators.
Versions 6.5 to 25
Dell XPS- i7-6700 @ 3.4Ghz, 16GB ram, GeForce GTX 960 (2GB), Windows 10
Dell Precision 3510 - i7 6820HQ @ 2.70GHz, 16GB RAM, AMD FirePro W5130M, Windows 10