I have a PS Audio DirectStream DAC and transport, interconnected with an HDMI cable over their I2S interface. From what I understand, they reduce jitter (timing errors) with the separation of the bits from the timing on that interface.
Actually, the separation of data, control and clocks in I2S bypasses the S/PDIF receiver and any upsampling that might be in the DAC, so the signal goes directly to the D/A without conditioning or synchronizing of clocks. I2S is the native interface for the D/A chip. This does not actually reduce jitter very much, except for this bypassing. The jitter of the source is what you get to hear, so the lower that jitter is, the better the sound quality. I like this approach because as new sources achieve lower jitter, the same DAC sounds better and better. My own Overdrive SX DAC is like this.
If you think the PSAudio transport is good, you should hear my Ethernet Renderer, the Interchange, connected with HDMI I2S cable to your DAC. This will deliver signal with ~15psec of jitter. This can play files from any computer running Jriver or Minimserver.
I hope you are using a very good silver I2S cable. This makes all the difference. FYI, I sell one of the best on the market.
Steve N.
Empirical Audio