DAC in AVR vs Dedicated DAC

[eyecatcher]

Shouldn't be much difference in optical vs coax. I like optical too. It would work. The dock must support the apple USB core audio. Since it is either that or analog audio on the 30pin connector. But it's unknown what bit/sample rate it outputting. I suspect the stream would go down to 48khz or 96 for compatibility from the original source. Imho I would recommend eliminating it from the chain since it could lose some resolution and introduce jitter before the dac.