Budget DAC vs Budget CD Player?

I bought the Audioengine D1 when it first came out. I ran a Sheffield test and burn in CD through it for 72 hours. To my ears, it sounded no better via optical (Cables to Go 40231 SonicWave Glass Toslink Cable) than a $21 FiiO D3 DAC available through Amazon.

Kray- I currently have the 1st generation Emotiva XDA-1 DAC in my system. It is a wonderful dac and a steal of a price but the USB input on my unit is nothing special. I would recommend the latest version if you go with Emo, I think they improved the USB section. The remote control volume and swithching really comes in handy!

The DAC route also allows an upgrade path via USB converter, a la Musical Fidelity Vlink 192, JKSPDIF MK3, Audiophilleo, Anedio, Empirical Audio, many others. Using a USB converter to re-clock the signal offers significant upgrades in sound vs. the USB inputs in the vast majority of DACs.

Realmo- would you need a USB converter if using a ASYNC USB DAC?

Mik971- so how do you feed the DAC from your computer? Digital mini jack?

Usb to usb mini. My unit is not async so the sound was not that great. I ended up switching to a PURE I-20 ipod doc (i have an ipod too) and used the toslink connection to the DAC. It sounded much better this way. I would recommend the new Emo DAC(ansyc) and use a decent USB cord.