best way to connect pc to dac

No, and it is perfectly fine the way it is. The only alternative is to bypass the laptop and use a separate streamer like, e.g., the Chromecast Audio, the Apple Airport Express or the Sonos Connect. These all have optical digital outputs, apart from the analogue outputs that use their internal DACs.

There are lots of options, limited only by your budget and desire/ability to tinker. You have the bare minimum setup and it can certainly be improved. The Computer Audiophile forums are a good place to discuss with folks who are open to these issues and have lots of experience. I went from a Windows laptop to a server to a better server, used different cables, added external signal improvement devices, and linear power supplies. Each was a substantial improvement to the sound. Streamers are also a possible route, and these can also vary from a simple basic setup to a more complex one, with similar sound quality improvements at each step.

+1 re the post from @jaybe 

There are also gadgets that are placed inline that claim to improve the USB signal by reducing jitter. Schiit Wyrd is a reasonably priced option for $99. As always, there are much more expensive options that reclock the signal and may improve the sound. With your current set up, at the minimum you should run your PC on battery and not on AC since the PC power supply adds a lot of measured noise to the signal.