Harry, you are trying to do what I do, and the PCM conversion is necessary. I'm using an Edirol UA-1D right now, which has a USB dongle on one end and a connector for coax PCM out on the other. Nothing else, no DAC. Sounds good for background music running into my Theta (I'm using mp3s compressed with -alt preset extreme, not uncompressed AIFF/WAV/AAC). I believe the Edirol is limited to 16/44.1. Since USB is an asynch protocol, I believe there should be no USB induced jitter in such a setup. Not sure what RSBeck's set up was with the M-Audio, but I previously used a Sonica from M-Audio to do USB to PCM conversion (the version I had was not equipped with a DAC) and it sounded fine.