Wat. Most rendering operations take place on the GPU... you don't need HLSL/GLSL/CG/etc to do that. That however allows you to program the shader pipeline and modify the rendering command buffer. Depending on the type of shader you make you can give different outputs and receive different inputs.
Pixel, Vertex, Compute, Tessellation, etc.
& if by chance you're wondering why ID3DXFont is so slow is because the internals work. It renders it to a DIB then blits it to the back buffer's surface (iirc) using GDI. I'm not sure if it does any caching or not but I doubt it.

Anyways a far better way to implement it is to use a texture for the font and use sub-texture rendering to render which character you need.

There's plenty of ways to speed up draw calls... and hacks. Most hacks have piss poor design, unfortunately.

p.s. you should only change ( and restore ) the render states you need to use... changing render states isn't cheap so you should avoid it where you can.