Phil - Each volume control technology has its deficiencies, so all of them are a compromise of some sort. The best scenario is probably to do some reduction in volume using a DAC digital control, gain control and then additional drop using S/W volume control. You can do about 10dB with a good volume like Amarra has without any SQ impact. If you can find a DAC with several gain settings, but no volume control, this is probably best. Set it as a lower setting and then reduce more with S/W volume on a computer.
Like almost all design, its not so much the technology as the implementation that makes a good performing circuit. If the digital volume control on the DAC is implemented well, you will get excellent results.
HAP-Z1es is correct.
Steve N.
Empirical Audio