Is there a qulaity DAC that has USB and coaxial.

Excellent advice above. I'd add that more recent USB models that take advantage of current USB>DAC technology are a significant step above previous implementations of USB. In the case of the later the USB would sound markedly inferior to the direct SPDIF from a transport. With current technology you'd be hard pressed to tell the difference. So if both are important to you, look at more recent USB DAC's. Empirical is a good suggestion. Other's that have very good implementation of USB include Wavelength (some of his DACs are USB-only though so be careful if you want to run a separate transport), Wyred4Sound, Bryston, Burson, PS Audio, and others. You'd really need to pick a budget and then start listening to how some of these DAC's sound as they don't all sound the same. That choice is entirely subjective.

Hi Early,

Yes there are a lot of options out there, and I'd agree with recommendations that you pay attention to the USB implementation. Though there is some debate and some exceptions may exist, generally async USB implementation is regarded as superior. And think about whether you will be using hi-rez digital files (24/96 or 24/192) either now or in the future (and I'd recommend that you do check these out, they sounds fabulous especially if well-recorded). The standout bargain to my mind with all of the above capabilites is the Wyred4Sound DAC2 at $1500. If you are not interested in spending that type of money, you might want to check out the Wyred DAC1 (it's USB is not async and limited to 24/96) or the Eastern Electric DAC (limited to 16/44 via USB). And then there are the USB to coax/BNC etc converters. Many of them offer async USB implementation.

Thanks for the feedback. I am interested in but have no experience with hi/rez digital files, and have a budget of aroound $3k for DAC. Currently listen to a Bel Canto 2 which is pretty decent with McCormack UDP as transport. Other components are Mastersound 300BSE, and Harbeth Hl5's, (they sound pretty darn good with only those 15 or so watts). I'm thinking about going to a computer based server and USB DAC, or maybe stay with my Squeezebox Touch and Apple lossless files via wireless. Thoughts about that?
I sincerely appreciate the input.

With a $3k budget, I'd add the Antelope Zodiac+ DAC to the list. And you get a headphone output and amp as well, if that is of interest to you. Sweetwater and elsewhere have a 30 day return policy. Depending on features you could also wait for the non-plus Zodiac to come out, but it is limited to 24/96 via USB, as opposed to the 24/192 of the +.

If you happen to have a Firewire output on your computer, the Weiss DAC2 is $3k.

Now that you mention your budget, perhaps PS Audio PWD could be a possibility. Please note, though, that it's a full sized component in width and depth at around 17". Not sure if form factor is an issue as opposed to physically smaller units such as those mentioned above.