Technically Step 2 should be legal, as covered by the old VCR case law (I think it involved Sony). Making a backup of a VHS tape or audio casette was legal, thus it should be legal for other formats, also.
However the sneaky bastards then went and lobbied for a law that makes it illegal to circumvent DRM. So, there shouldn't be anything wrong with writing the raw files to a drive, but if you have to crack the DRM to get the files to play then you're definitely doing something unlawful.
Disclaimer: "should" is doing a lot of heavy lifting in my comment lol what I say is not in any way legal advice. Also, it could be that the VHS law was more about "time-shifting", ie recording live TV so that you could watch it at a more convenient time.
Copyright also used to only be a civil offense, meaning law enforcement wouldn't come after you, but a rightsholder might. However, they lobbied over that as well and ended up with a relatively low bar - if the value is over something like $1,000 then it's automatically considered commercial and "criminal" copyright infringement.