Thanks for your detailed reply. You are right that when I was talking about DAC, I mean DAP. I think maybe the point of using USB audio is that some high end DAC doesn't have audio player software or their software is not as good as the one on smartphones (e.g. poweramp). Is that right?
My understanding is that USB audio allows you to pass your music data to an external portable DAC.
But why do I want to do that if my DAC can already store songs? Shouldn't I just store my songs in my portable DAC and play from there and ignore my smartphone?
Disclaimer: I am completely new to portable DAC. I've never tried to set up USB audio out. So please bear with me if what I said is a bit off from the reality.