Preferred Audio Output, USB or 3.5mm?

I'm using USB from my mac to the DAC. I also tried the headphone jack with a toslink cable to mini rca jack (the mac outputs optical from the headphone jack). Not really much difference. In either case an asynchronous dac will deal with any jitter issues common to both methods. For either method a good quality cable makes a big difference over the cheapo stock stuff.

Miewan - Thanks for the reply. After more thought on this, I don't think the output (USB or 3.5mm) makes a difference since the output is through a DAC before the preamp. The DAC I will use (TC7510) does not support USB, so I'll use the 3.5mm output and no need for a USB DAC.

Jax2 - A TOSLINK TO MINI PLUG CABLE ( http://www.cablestogo.com/product.asp?cat_id=2001&sku=27015 ) allows connecting to a DAC from a 3.5mm. I use this type of connection with Airport Express and TC7510 DAC.

Ah, forgot about the mini-Toslink via the headphone port. I haven't actually tried that except for with an Airport Express and it was absolutely terrible. But that is a different device. In that case it will depend upon the implementation of the USB with the DAC you are using. If the DAC has poor USB implementation you might try using a DIP/dejitter interface which can go between either USB or Toslink, but would require an additional cable. I don't have any experience with you DAC to say whether any of this would be worth it. If it sounds good to you, that's really what's important.

HDMI would be the better way to go.

I do not think Mac's have HDMI ... at least not Mac Mini's (unless the latest models do)