Is iPod Digital Output Possible?

I've been scouring through all the ipod accessories and cannot find what I am looking for. Perhaps it does not exist. I was wondering if there is any cable or dock that will allow me to extract a digital output from my iPod video (or any iPod for that matter)? There's plenty of adapters to pull the analog out, but it seems like you always need a computer interface to get digital output. Why? Is it just a matter of software to sort out the library? More to the point; I want to connect my iPod directly to my DAC or even to my Waveterminal (requires the squareish delivery end of a USB cable) to my DAC...is this possible? Has this been discussed previously? If so, where the heck was I? No, don't answer that last part! The authorities may be listening in! Just tell me how to get a digital stream out of my iPod if it's possible.

Marco