Where/How can I further improve PC audio quality?

re Spotify Premium (from Wikipedia, Spotify entry)...

"Spotify software is proprietary and uses digital rights management (DRM) to prevent unauthorised use. Users who agree to Spotify's Terms and conditions agree to not reverse engineer the application.[87]

Audio streams are in the Vorbis format at q5 (ca. 160 kbit/s),[88] or optional q9 (ca. 320 kbit/s)[89] for Premium subscribers. Spotify has a median playback latency of 265 ms. It amounts to 390 ms without local cache usage.[90]"

(from Wikipedia Vorbis entry)

Vorbis had been shown to perform significantly better than many other lossy audio formats in the past in that it produced smaller files at equivalent or higher quality while retaining computational complexity comparable to other MDCT formats such as AAC or Windows Media Audio.[28][29] However, as of 2014, not many further significant tests had been made.

Listening tests have attempted to find the best quality lossy audio codecs at certain bitrates. Some conclusions made by listening tests:

Low bitrate (fewer than 64 kbit/s): the most recent (2007) public multiformat test at 48 kbit/s showed that aoTuV Vorbis had a better quality than WMA and LC-AAC, the same quality as WMA Professional, and a lower quality than HE-AAC.[30]

Mid to low bitrates (fewer than 128 kbit/s down to 64 kbit/s): private tests in 2005 at 80 kbit/s and 96 kbit/s showed that aoTuV Vorbis had a better quality than other lossy audio formats (LC-AAC, HE-AAC, MP3, MPC, WMA).[31][32]
High bitrates (greater than 128 kbit/s): most people do not hear significant differences. However, trained listeners can often hear significant differences between codecs at identical bitrates, and aoTuV Vorbis performed better than LC-AAC, MP3, and MPC.[33]

I have no business interest in Spotify but am a satisfied Premium subscriber.

Download the sampler form HRTracks so you can see if you can hear the difference between low bitrate (Spotify and MP3) and high bitrate music. Its a world of difference on any reasonably resolving system.

I think Mesch has given you very good advice. In digital playback the clock is of paramount importance to reduce jitter. A computer is an electrically noisy environment and generally a bad one for a precision clock. A USB-to-S/PDIF converter with asynch USB (probably they all are) will have a precision clock housed in a more conducive environment and the asynch USB will have the computer clock slaved to that of the converter.

This will likely be the biggest bang for buck improvement. Going to higher resolution audio might be second. If you were to go with CD quality then the choice of playback software would be significant too, and the computer itself.

We are suggesting reclocking MP3's? to get to what? an MP4?

To me, at this time, my Spotify Premium subscription more than satisfies. I'm delighted with their solution to streaming audio and the simple to use GUI. The sound quality I have achieved so far is close to CD playback, however, I'm attemting to "tweak" out the best it can offer. The solution I'm going to try is a better card that has only digital outputs and claims to support asynch for improved clocking and a claimed low jitter output.

Thanks all again for your help!