I figure all the pain and research I've gone through can be helpful to someone, so here goes:
Chapter 1: How it all began:
I bought some DT-880 600 ohm's to upgrade from my ATH M-50's on Amazon for $245 thinking I just landed myself a steal. I have spent a lot more than that on gear since.
TLDR; Lesson 1: the cost of HiFi extends far beyond a nice pair of headphones.
Chapter 2: Introduction to HiFi:
I received my DT-880's with a FiiO E9K on a cool January night. I plugged them into my home PC through a Xonar DX soundcard. My head exploded. The sound-stage was unlike anything I've experienced. I describe it as a "big bubble of sound" surrounding my head. I lost many hours just sitting there listening to music and experiencing it.
The next day I took them to work and two things happened: first, it sounded like flat crunchy crap through my work iMac. Second, the E9K stopped turning on.
TLDR; Lesson 2: onboard sound sucks, even with an Apple product.
Chapter 3: Amp's and DAC's:
For those that don't know, a DAC is basically an external sound-card to bypass your crappy onboard sound. If you have an Apple computer you basically NEED one since you can't upgrade your sound card to something decent and affordable like a Xonar DX ($80) or STX ($180).
My amp dying actually provided me with an opportunity to upgrade to something not made in China, so I thought that was a mixed blessing. Also Amazon's return policy for defective items is awesome (they pay return shipping).
I read a lot here about Schiit, so I bought the Modi / Magni combo, and received that Schiit two days later.
The Magni has been great, although from my memory slightly "softer" than the E9K with a slightly smaller sound-stage. For the money I'd highly recommend it.
My co-worker actually demanded to buy it from me after listening to his music (without a DAC) and loving the difference it made. He was coming from despair after realizing his previous amp (ART HeadAmp4) was filtering out the high-end after above 15k.
The Modi was my first introduction to a DAC, and I thought it sounded... wrong. There was this inclusion of more bass than should exist and instead of a wide sound-stage I felt like I was being force-fed a thick mass of sound. Highs also had a "crunch" and I felt that everything lacked detail. Spaciousness requires silence and what came out of the Modi was just weird.
HOWEVER - this sound was still significantly better than the onboard iMac audio. It was just not comparable to the Xonar DX.
TLDR; Lesson 3: Xonar makes pretty good sound cards and use pretty decent DAC's. A good DAC makes a big difference.
TLDR; Lesson 4: A good amp makes a difference even without a DAC. A bad amp will make your sound even worse than no amp.
Chapter 4: DAC's are expensive:
A good DAC tends to run between $350-450 from common suggestions (DacMagic, V-DAC, BitFrost), and I found this pricing to be absurd considering how my $80 Xonar DX left me quite content. So at this point I was considering either selling my DT-880's and never listening to music again or putting a giant PC under my desk with a new DX to use as my music box.
Highly rated DAC's in a 'reasonable' price range were the Audioengine D1 ($170), JDS ODAC ($150), and HRT Music Streamer II ($150). I decided against the D1 because it uses the same chip as the Modi, and against the ODAC because many reviews considered it "slightly harsh" on the high-end which I am sensitive to.
So I got the HRT Music Streamer II.
TLDR; Lesson 5: DAC's are expensive.
Chapter 5: Software Decoding:
Pairing the Magni with the MS II, sound felt more accurate and the sound-stage wider than the Modi, but there was still the high-end "crunch" and less detail than the Xonar DX.
That made me sad.
However, I remembered reading about how software audio decoding is the devil, but there was a lot of dispute as to whether or not people claiming that products like BitPerfect, PureMusic, Fidelity, or Audirvana actually made a difference. So I read up on what people thought of the different products and for the money Audirvana seemed to be the best of the bunch.
I downloaded a trial of Audirvana, which integrates with iTunes or functions as its own media player. It makes a HUGE difference. If you can't tell, then either Apple computers are just plain garbage, you already have a good sound card, you are listening to 128 kbps music, or you are running some junk headphone equipment.
The only downside of something like Audirvana is that it claims your entire sound channel, so no other programs can make a peep if you are listening to music.
TLDR; Lesson 6: Software decoding ruins audio quality. Get something like Audirvana.
Chapter 6: I am going to end up spending a lot more money:
I bought a JDS O2 Amp to replace the Magni that my co-worker is planning on buying from me. I'm not sure that I love it. I might get a valhalla. My wallet hurts.
To be continued?
In order to make the best of your computer's audio, you need the following:
1) A decent DAC (whether sound-card or external).
2) A decent Amp
3) If on OSX, something like Audirvana to bypass Apple's Audio decoder.
I hope this was helpful!