EDIT: Ive been lurking and ive already ignored the majority of the people ive seen who can derail threads like this in a heartbeat...
OK, so i have an iTunes library filled with mostly WAVs, AIFFs ive ripped and some 320kbps MP3s. Now, currently i have a Yamaha 667 receiver with the iPod dock, a Parasound HCA-855A amp, and some Def. Tech. SM55 paired with an Emotiva Ultra 12. I wanna have a swiss army knife solution for my movies and music, approx. 50/50. Now for 2.1 playback, (using Direct Stereo, which is similar to Pure Direct except it keeps the sub) the iPod dock uses the internal DAC in the iPod (160GB classic) which ive been reading, isnt that good.
So a solution i was looking at was to get a iPod dock with toslink out so the receiver DAC can process the audio for an improvement in SQ. Now, i am in the market for a new receiver and the majority of newer receivers will have USB ports for digital sound, bypassing the iPods DAC. Ill be looking at Pioneer Elites and Yamaha Aventages. Also, another solution was to keep my current receiver, get a dock with toslink and get a dedicated DAC. (Peachtree DAC IT, DacMagic, etc.) The Teac DSH01 in particular seems interesting since it solves both of those issues with a BurrBrown PCM1796, which i understand is a higher end DAC. http://www.americanmusical.com/Item--i-TAS-DSH01-LIST
Now, i used to think DACs were placebo until i tried a Nuforce on a laptop. Music i was very familiar with played cleaner and better separated in my Shure SRH840s. Very startling to say the least. I kinda figure, if it can do that against my laptops soundcard DAC, what can a DAC do for my setup?
Any pros and cons of these options? Are external DACs vs the ones in newer receivers equal in terms of SQ? Please tell me what you think guys.