You would be correct. You can chain multiple C-0437′s by using a jumper cable out of one of the outputs into the input of the 2nd C-0437. Regarding the security setting, you are correct there as well. You would only want the first C-0437, the one you have your security system connected to, to be set to normal. The second C-0437 would be set to bypass since it is not being used.