Digital XLR vs Digital RCA

The better cable with RCA connectors sounds much nicer.

I was told by someone who designs high-end DACs that a balanced digital cable is preferable to single ended and that if only RCA connections are available it’s still better to use a balanced cable with RCA adapters.  I have no technical understanding of why this would be but just thought I’d pass it on FWIW. 

It doesn't matter to my current Directsream dac XLR or RCA but it does matter to the source feeding the dac apparently with XLR being most popular. The Directsream likes the I2S input the most with my Perfectwave transport sounding best using the I2S  output from transport to I2S input in dac. Using an HDMI cable has much improved the sound. When I get my dedicated Auralic Aries G2.1 streamer I will use an XLR digital cable.

Digital interface:
The cable shall not be an issue, if the DAC section of the receiving unit is implemented properly.
The most common issue with Digital interface is Jitter. To prevent jitter a PLL is implemented over the input device, to synchronize clock and data within an accuracy of less than 50p Sec.Most PLL devices of the last 10 years would do (unless poorly implemented).
If you have an appropriate PLL, the digital cable should have no impact on sound quality.
As most digital Audio interface is PCM, implemented by SPDIF interface,
a single line carries both clock and data on  a bi-phase method.
The two are separated and the clock must be synchronized with the data.
For that sake, CD players with analog output were a better option over separate transport - DAC solutions, till PLL were good enough to go below noticeable jitter issues. 

I disagree from experience. The quality of the digital cable, amount and quality of silver content, has dramatic affect in sound quality.