For long runs, I had bad luck w/toslink... Just sounded cloudy. I use an Edirol UA-1D, which converts USB to coax with a looooong USB run and a short coax run to my Theta DAC.
I have not done any critical listening comparing toslink, coax, and XLR connections, but from everything I know, I would avoid a toslink connection, particularly a long one. -J
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