If you'd connect the E17, for example, to the analog input of the Xonar DG, you'd basically loop back the signal, but with one major difference:
The signal will be reconverted back to digital by the DG's ADC and you'd end up with a much poorer signal than you began with.
In terms of improvements, I've found the E10 (E17's precursor) a significant upgrade from the DG.
While I haven't heard the E17 myself, the general consensus seems to be it's a noticeable step up from the E10.
Personally I use a HiFimeDIY Sabre USB DAC 2 (with or without the BCL clone amp) to drive my K612 pro's.
The Sabre 2 is a simple and straight-to-the-point 70$ dac/amp. Compared to my Xonar DG the differences are pretty obvious to render the soundcard redundant for my music listening.
Even compared to the more upscale Xonar ST, which I've had briefly, I've found the DAC to be a more compelling option (sound quality is better and the cost is much lower).