PC -> Toslink -> TEAC UD-H01 DAC ->XLR for speakers and RCA to Asgard
Pesky EMI and ground loop noise can't follow my music through optical.
I connect to my DAC1 via optical. This prevents any kind of ground loop or anything electrically weird (some USB conenctions to DACs I've used would occasionally send a slight buzz noise whenever I would move my PC mouse, for example).
Doing a casual test between optical, usb and coaxial, I never noticed a sound quality difference, but optical seems to prevent any weird electrical anomalies from the PC that could be affecting the end-result sound.
The jitter from an optical cable is higher than USB, sure, but in any decent modern sound system it is still far too small to be heard. Most of the jitter stuff is going to be about the clock in the DAC that is receiving the signal, anyway. If you have a good DAC, it will be able to take a jittery signal and make it totally OK. For example, my DAC1's manual dedicates a whole page describing their clock implementation and how it handles and mitigates jitter. And by mitigate, I really mean mitigate -- it might be better word choice to say eliminate. We're talking levels so low that you'd have to be supernatural (ears and brain akin to an Audio Precision Analyzer) to be concerned by it.
After reading dozens of articles and forum discussions about jitter, I am on the position that jitter is not an issue in a well-setup, modern system, regardless of interconnects used. It is still in the contemporary audiophile vocabulary, though, so you'll still see high-end DACs marketing about how they prevent jitter -- but this kind of stuff is like how HDMI cable manufacturers advertise their methods of data loss prevention - it's almost always just stuff that's built into the standard spec of everything these days, just dressed up with more words to try to make it a selling point of a product.
I have a Meier Audio StageDAC and I connect to it as follows:
Sugden CD Player - Coaxial
Mac Pro - Toslink
MacBook Pro - USB
All cables used are good quality budget ones, no magical cables are used.
I don't think there is any significant differences in the sound quality of the three different ways to connect and in fact I have chosen them for completely practical reasons.
I connect my pc through USB with my Antelope Audio Zodiac + DAC. Since I am looking around for upgrading the sound I get through usb, I stumbled up on the well known SOtM USB-card. I was initially looking to buy this card second hand, because it is quit expensive. On my pc I use JPlay to play the music files. It was on their forum that I start reeding raving revieuws about PPAstudio sata and usb-cables. I also saw that they came with a USB card, and states that it is better then the SOtM cards. Because of the good revies of their cables and the low price of the card compared to the SOtM (80 euro's against 300) I thought I will give it a try. So I just ordered the card. Can't wait to try it....
Dell XPS -> USB -> HiFace -> Coax -> Reference 10.32
Dell XPS -> USB -> Reference 10.32 (TCXO)
But prefer the former one, sounds slightly better to my ears.
It was the same with Audio GD DAC19MK3 - SPDIF for the best SQ, then USB and Optical.
The whole USB connection thing is pretty complex. The more I read about it the more complex it gets. Though it shouldn't make any difference, I rigged up my iPad with my Audiophilleo 1 and it sounded different to when I used my computer. Go figure! There seem to be many ways to implement digital input inside a DAC that, try as we might, what we think will be good or will or wont matter will only really be taking pot-shots at getting the best out of things. It does seem like the USB input of some newer DACs though is far better than the ones of old.
Anyhow, I've gone back to the USB input of my DAC because it IS an attempt by the manufacturer to get the best result possible (using custom firmware with everything switched off but I2S output) and the result is excellent.