no it doesnt, there is a very small number of portable dacs that it will work with. it has a limited digital output in that unless the USB/spdif convertor/receiver in the dac is powered by its own battery, chances are it will not work wit the ipad digi out, some very low power devices may, but its very hit and miss.
what this means for the OP is that there is a very limited range of dac/amps that he can use the ipad with, very few indeed, so if thats what is keeping you from the stepdance, I wouldnt let it. to use the vast majority of portable dacs, u need a netbook or a laptop in a transportable rig, not many have an optical input that can be used with an iriver iHP1X0 and pretty much only an iriver, everything else you would need USB output.
so although I havent heard the stepdance, it ranks right up there with some great amps that I do own and I do own an ipad and iphone, both make pretty good portable sources, what matters more is the match between your headphones and the stepdance IMO
and to the OP, this sort of deserving attitude will not go very far here. there are numerous threads just like yours started every day ie. how will amp blah sound with player meh with my ears, with my random headphones and my random music; unless you have something to set yourself apart from that and perhaps ask a less subjective question, you will not have much luck. especially starting so many similar threads that will just clog up the search engine and make it less useful for others wanting to research the same question, why not ask the question in the review thread?
so now that you have insulted and cast generalizations upon us, how do you think you will go now? does this approach work well for you in real life?