Actually, there's a couple of different SAE specifications. The latest, common one is SAE J607. I haven't purchased the spec. from SAE yet ('cause it ain't free, ya know) I believe this one (which is the same one used in Buell's press releases) is basically a "real" measurement of torque, @ standard temp. and pressure... but at the crankshaft, not at the rear tire. This data would be taken using a load cell, measuring the force applied by a lever, converting it to a Moment (torque in ft-lbs). Then multiplying it by RPM and dividing by 5252 to calculate HP.
This is how Buell can claim 100hp from a stock XB12R and sell it to the consumer... because nobody but engineers know what the spec means!
Only a brillant madman could make sense of the formula that DynoJet uses to calculate "corrected HP"... As far as I'm concerned its a crap number. A reputable dyno manufacturer should tell you how their numbers are derived... DynoJet won't. Its obvious to everyone paying attention that DynoJet has artificially inflated the number so bike shops can impress customers. Thats good for business, but bad for being taken seriously.