Quote:
Originally Posted by
ccbass 
The issue is that the DACMagic only has coax/toslink and a USB input.
No, the issue is that the iPod/iPhone will only output the digital bits to "Apple licensed" gear like the iWadia:
http://www.wadia.com/products/transports/170i/
There may be one or two others who specifically license the rights to do this directly from Apple (I'm not sure). If you don't have this device then you cannot pull the digital information from your iPod/iPhone....sorry.
Simply having a LOD into your receiver does in no way mean that you're pulling in the digital information and having your Receiver's dac do the work. What you're getting is the "un-attenuated" analog signal...which is better than through the 1/8" stereo jack.