External DAC connection for Bluesound Node 2i (after "Another streaming newbie" thread)

If you want a neutral DAC that measures very well Topping D90 or Benchmark DAC3.  I've had both and I can't say which is better they both are very good the Topping has a MQA version of the D90 if that's  important to you.

Cables I've owned:
Acoustic Zen Absolute 75, 
Oyaide DB-510 Digital BNC were both very good. Many folks here like Black Cat. I've found you have to spend some money to get major improvement with digital cables.
OTOH, you don't have to spend a lot on a Dac these days. I have an Audio Note and can also recommend Metrum. Haven't personally heard the MHDT or Border Patrol, but they are highly recommended and owned by some members and are very affordable. These are all R2R NOS Dacs which I like for their organic sonics and realism.
I owned a Chord a few years back which I liked. It uses a buffer to control jitter before outputting the signal (called a FGPA).

If you like the sound of the Bluesound without an external Dac then stick with it. I have a 2nd system running that way. I think it sounds fantastic.

I should say upfront that I highly respect the Node 2 I started out with. I think it’s a terrific unit. That said, as others have mentioned, it can be upgraded upon but whether it makes sense to do so really depends on system context and how far you are trying to go.

My evolution (all into an Arcam A32 at the time) went as follows
1. Node 2 via RCA outputs
2. Node 2 via coax into Chord 2Qute – this brought a noticeable improvement out of the gate, but given the price differential and engineering in the Chord DAC, it better.
3. Auralic Aries into Chord 2Qute via USB – this surprised me, and I was hoping that "digital streaming is digital streaming and 1s and 0s are all the same" would be true, but it was actually another really significant step up (and shattered a lot of my previous flat-earth conceptions :) )

So basically: it’s a terrific unit, especially given its value. But if you are down the path to more resolving gear downstream, both it’s streaming as well as its DAC function have room to evolve.

That being said, it’s still one of the best values out there, especially as a Roon endpoint for a 2nd system.

I'm using an optical cable (paid around $100, but don't recall the brand). It's connected to my Audio Aero Capitol Reference DAC/CPD and sounds wonderful... much, much better than the Bluesound internal DAC in my Vault 2.