Originally Posted by average_joe
I believe the iPhone 5 only has digital out, so you will need a DAC.
Thats quite a sweeping statement. So far ... you cant just recommend "a dac" for the iPhone 5 , no-one has build a digital out connector yet and no-one has promised compatibility with the digital out signal that apple will probably encrypt or do something else with , its not like apple are providing you with a tosLink out or generic USB compatibility here ...
So at the moment I would recommend the new Lightning to old 30 pin dock connector that provides old fashioned Line out , and use one of the normal 30 pin LOD connectors until some company pays apple the licensing fee for creating a compatible digital connector and providing standardized output for a DAC as you suggested.