Best DAC for iPhone - Volvo Car Play Connection?

there are many in-line DAC's out there that may work. Audioquest makes a selection, there are quite a few others out there now. You can find many reviews online usually in the head phone sections as most use them for headphone listening. 

If I understand the situation the DAC being used is on the car side. The iPhone would be sending a digital stream and the B&W converts to analog and amplifies.

I think this is correct.

This is something I am not clear on.  

The audio is coming from the iPhone and going out of the audio out of the iPhone.  So, therefore, the audio coming out of the iPhone is already going through the DAC in the iPhone.  If that is true, is there any way to bypass the DAC in the iPhone with an external DAC or not?

Please let me know what you think.  Thanks!

+1 Glennewdick

Check out the Audioquest Dragonfly line, notably Dragonfly Red. The form factor is ideal for what you are doing.  Plug it in to a Lightning-to-USB converter.  The Tidal app on your iPhone will recognize the Dragonfly and treat it as a MQA endpoint, direct-streaming digital to the Dragonfly DAC and yes, bypassing the generic iPhone firmware.  I is actually quite good, and can also be used to drive headphones.

Pretty sure your iphone is sending digital to your car.