Thanks for the responses so far. Tobias, you write
"Use a 1.5 meter-long coax digital cable to get the best definition out of your setup, at any frequency. The extra length keeps reflections within the cable from upsetting timing at the DAC end."
I was actually planning on using a much longer coax cable than that to run between my computer and the DAC (maybe 5 meters). Is that a bad idea?
The cable between your computer and your DAC would be a USB cable, not a coaxial. The coaxial cable would go between your DAC and your system (into your preamp or integrated amp). USB cables do have a length limitation (can't recall what it is, but I think 5 meters is probably over it). You can use some sort of signal booster to extend your USB further. You may want to check into that if you are needing to run 5 meters between computer and DAC. I'm not sure if it has any effect at all on sound quality.
Sub $1k DACs for USB use? I'd suggest MHDT Labs Havana (a couple on A'gon right now), or April Music has been recommended highly to me by someone I respect. Others seem to like the Benchmark USB version but I could never get it to sound good in several systems....still, it's highly respected by many. The DAC will really have quite a profound effect upon how the music sounds so you may want to buy used and sell if you don't like it to find out what appeals to you.