Hi Art,
The DAC is in the Apple TV (should be a Wolfson, like the ipod and newer Arcams). There are 2 choice: playback from the apple tv internal hard-drive or streaming. I use the Apple tv internal hard-drive, with my music ripped in apple lossless.
The apple TV does have a toslink (optical), but I don't have an external dac.
I can't hear any difference between streamed lossless and the playback from the hard-drive in the apple tv, but I know that the streaming can be tweaked to sound pretty good (some driver swapping, etc...)
Whatever doesn't fit in the Apple TV's HD, I stream from my computer. BTW, Apple Lossless is a very good format size-wise (about 300MB per CD, average).
Hope this helps.
The DAC is in the Apple TV (should be a Wolfson, like the ipod and newer Arcams). There are 2 choice: playback from the apple tv internal hard-drive or streaming. I use the Apple tv internal hard-drive, with my music ripped in apple lossless.
The apple TV does have a toslink (optical), but I don't have an external dac.
I can't hear any difference between streamed lossless and the playback from the hard-drive in the apple tv, but I know that the streaming can be tweaked to sound pretty good (some driver swapping, etc...)
Whatever doesn't fit in the Apple TV's HD, I stream from my computer. BTW, Apple Lossless is a very good format size-wise (about 300MB per CD, average).
Hope this helps.