According to gamesindustry.biz, an unnamed source says Activision is working with Euro development companies on a "sequel and downloadable content" to music game DJ Hero . Supposedly, musicians DMC Champion and judge DJ Qbert have been approached for inclusion in the new content.
Personally, I'm a little skeptical. DJ Hero isn't out yet, and Activision has to be a little concerned as to whether the game will sell -- Yes, they love sequels over at Activision, but they love money even more. I'd say early work on a sequel to a not-sure-thing game is unlikely. It seems much more realistic to believe that Activision is actively developing DLC for the game, a plan they've had all along.
But, on the other hand, if you pay $100 or so for the DJ Hero turntable, you'll probably want another game for it... and since no one else will be able to use the device, you gotta hope there will be a sequel, anyway.