Unless your computer is in the same room with your stereo (why??) then avoid using the computer as a source component. Stream the music over your home network instead, so some device that outputs SPDIF to your DAC.
I use the Squeezebox system myself and love it, but if you insist on iTunes, you do have some options. The Apple Airport Express will do exactly this - you can stream your iTunes collection to the AE, and the AE device will output a toslink signal to your DAC. Note that the AE requires a special "mini" toslink connector.
I use the Squeezebox system myself and love it, but if you insist on iTunes, you do have some options. The Apple Airport Express will do exactly this - you can stream your iTunes collection to the AE, and the AE device will output a toslink signal to your DAC. Note that the AE requires a special "mini" toslink connector.