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I also found the DI (slightly) better than battery powered Hiface (jkeny's Hiface) which is already a big step up from the stock Hiface.
I was able to use the Digital Interface with USB2ISO (ADUM) isolator but the improvement was small (baurely noticeable) in comparison with what the USB2ISO isolator brought to the Musiland Monitor and Teralink X2.
On the other hand, upgrading the stock clock with a 1ps Tentlabs XO provide a noticeable improvement (more natural sound and better flow of the music amongst other things).
According to Kingwa, the clock works only when the upsampling is engaged (which I use). I have chatted a little bit with Kingwa regarding the upsampling and we share similar findings (i.e upsampling makes an improvement). I know that some "purists" look down at upsampling but the same could be said for oversampling used in most DACs. Once we depart from NOS (non oversampling), I personally don't care about what kind of processing is done as long as it sounds good.
I have also compared a few (same) tracks at 16/44 and 24/96 bought from HD Tracks and Linn Records and the upsampling on the DI is the one that gets the 16/44 files sound closer to the 24/96 native files. I tried different software upsampler (SoX, Secret Rabitt cods, PPHS...) and none of them comes close to the upsampling on the DI which is rather surprising since in theory the software upsamplers have the advantage of dealing with stored data while the DI has to deal with real time (jittery) data. It has perhaps to do something with the clocking being better at 96K than it is at 44.1K.
BTW, using a good clock such the Tentlabs should yield better results especially for those who don't use any power filtration (better clocks usually buy you better power supply noise rejection and better clock phase noise).
Power wise, is the external PSU better than ADuM power?