What would be a typical use for the mini plug optical out that is shared with the headphone jack? If you were outputting digital to a preamp - wouldn't it want to use it's own dac to play analog to your speakers? That would defeat the purpose of the AK120's dac conversion.
I use the optical out with external DACs. It works great with the Meridian Director and the Chord Hugo. Both of them sound better than the internal DAC. Of course with the Director you need an amp as well because it's line out only. I wouldn't buy a Digital Audio Player without this feature.