Hi, I have seen and answered so many of the same questions regarding digital audio that I decided it's time for a reasonably comprehensive primer to digital audio. It seems a great deal of people do not understand what goes into a digital audio system that this is truly necessary and for those who know enough to get along might just learn something along the way as well. Scope This primer will deal with a "standard" digital system without any digital processing or filters such as DTS, Dolby, 3DCMSS, etc. I wish to keep the scope of this article as concrete in the "2-channel headphone world" as possible, lets not get off track. Section 1: Parts involved in a digital system Lets start with an introduction and a description of the main parts of the digital system. ALL DIGITAL SYSTEMS WILL CONTAIN ALL OF THESE COMPONENTS, no exceptions. Please try to understand this FACT, you will not have a digital system without any of them. Yes, there are lots of "devices" (although I would not call them that) that contain many or even all of these components in a single case/enclosure/box/card/etc. Please note that I will use the term "device" to describe the following : "A circuit, that may be standalone or part of a system or sub-system that performs a single task". This simply means that by "device" I do not mean a "standalone box" or separate object, simply a circuit or combination of circuits that are designed for the purpose of achieving a single goal. Digital Media : A device (such as a hard disk, flash disk, CD, DVD, etc) that stores digital music on it. Source / Transport : A device or interface that is responsible for reading from digital media and outputting a digital output stream. Digital Receiver : A device that reads a digital input stream, restored clock if necessary (more on this later) and sends it (usually in I2S format) to the DAC. DAC : Digital to Analog Converter. This device reads a digital input stream and converts it to an analog output stream (whether this be a Current-Output DAC or Voltage-Output DAC) I/V stage (Current to Voltage Converter) : A device that converts Current output from a DAC to Voltage output that can be amplified and handled down the line. *Note before you get totally confused - some DACs are "Voltage-Output and either do not need this done or simply have the I/V stage is inside the DAC chip*. Analog Output Stage : An "amplifier" that takes the low-level signal from the DAC and amplifies it to what is called "line level", generally between 1V and 2V (although some go lower/higher than that, I'm just taking a "general medium" here). The "output stage" description is a little all-encompassing as it generally includes a low-pass filter and well as amplifier. This also may be on the DAC chip itself. Amplifier : A device that amplifies the analog output stream from line level to "headphone level", or "pre-amp level" because almost all headphone amps make wonderful pre-amps, although I won't get into power amps in this article. Section 2: Connections between system parts Now that we have handled the basic components of the digital system, lets get into some details of the stages, interfaces and interactions that go on. The way I feel this most clearly described is by showing the interaction between every step in the chain. Media -> Transport : Low-Level (beyond scope of article) data reading algorithms of reading data from media. Transport -> Digital Receiver : Here is where it gets REALLY complicated. There are quite a few ways to send digital data from one point to another (having eared a diploma which included digital communications and digital network security, I can say there's more here than most think). I will include the details in the "Digital formats" section. Digital Receiver -> DAC : Most likely I2S, sometimes S/PDIF. DAC -> I/V Stage : I admit to not knowing much about the I/V section of the digital chain and will simply state the simplified explanation - current of a certain amount goes in, voltage of corresponding amount comes out. This will certainly be edited once I learn more about I/V conversion. I/V -> Analog Output Stage : This stage is very simple (unless you choose to make it complicated). This generally happens on the same circuit board and within the same case as the "DAC Unit" since most DACs cannot send their output through interconnect wires (not powerful enough - don't think this is a drawback, DACs are simply not meant to drive interconnects), so the analog output stage is simply connected through a short wire or PCB trace and is a standard analog signal. Analog Output Stage -> Amplifier : This is where the wires generally come in; what people generally consider the "DAC portion" is completed and can now send a line-level signal to any other device such as a headphone amp, pre-amp, etc. Section 3: Digital Formats As I mentioned above, there are quite a few different ways to send digital audio (generally from the Source/Transport to the Digital Receiver, but sometimes directly to the DAC, depending on format and DAC input). S/PDIF : The most commonly used digital audio format. This Wiki article has some basic info on the protocol and it's applications. I suggest you read it as well as the part on Biphrase mark code. A key note on S/PDIF is that it is a streaming signal without error correction so what leaves the transport (and what's done with it before it leaves) and what gets to the receiver is a one-time transmission and must be transmitted correctly. Further to the article: 1) The clock being extracted from the signal - while BMC encoding does make extracting the clock easier, it still does not make it foolproof as there is still those two bits that may be read incorrectly (assumed the 2 same bits are actually 1), it just makes it easier to send both the data and clock at the same time. If proper re-clocking is implemented, Jitter is not a problem, otherwise, it can be. Do note that jitter can be a problem at different stages in the system, not just this transmission. Read the article, learn what it actually means. Good info on this can be found in papers by Dunn and Hawksford and possibly Pohlmann's book. 2) There are generally three ways to send S/PDIF : Optical TOSLINK, 75 Ohm Coax and 110 Ohm AES/EBU. AES/EBU is not going to be in scope of this article, but you can check out this Wiki. There is a great amount of info on S/PDIF here, it gets considerably more technical but still a good read. 3) Optical TOSLINK vs 75Ohm Coax with advantages and disadvantages: Optical TOSLINK is not an electrical connection, therefore it avoids ground-loops, Coax may cause ground loops if not isolated, preferably using input/output pulse transformers (this also times things well as pulse transformers are designed to send precisely timed signals). Optical TOSLINK cannot run over long distances (5m is long, 10m is getting dangerous), Coax can run for 10-15m without problems. There is an optimal length for coax, it is 3m-5m, this is due to signal timing. Optical TOSLINK should not be bent at extreme angles as optical signals are susceptible to reflection. Coax does not have any such restrictions. I2S : The native interface of most DACs. There is a little info in this Wiki. Generally this is kept on the circuit board although some transports can output this format and some DACs can accept it directly. Along with the data, there are 2 clocks sent separately, the Bit-Clock and the Word Clock. This means that there is no clock reconstruction and can be a very low-jitter signal. The master clock can sometimes be sent as well. This is also a send-and-forget standard and falls to the same limitations as S/PDIF in terms of error correction. USB : This gets a little interesting as there is no all-encompassing standard. Since USB is a computer connection, it is not restricted to send-and-forget. Generally the standard employed and used is USB Audio 1.1 as the drivers for this standard are distributed with most operating systems. USB Audio 1.1 is a streaming non-error-corrected protocol with a limited of 16-bit depth and 48kHz sample rate. The PC being a smart device so Audio over USB is only limited by the drivers and interfaces. Some devices like EMU 0404 USB have used the USB 2.0 protocol and with their own drivers (as well as firmware on the unit) can achieve higher bit depth and sample rates. Even USB 1.1 is capable of 24bit/192kHz, it just needs drivers to be written and USB receivers to be made to those standards. There seems to be a lot of confusion regarding USB Audio with terms like "USB DAC" and without a doubt, it can be confusing when such things are said. There is no such thing as a "USB DAC", there is such a thing as a DAC that has a USB receiver, sometimes they are even on the same chip, but nevertheless, it is easier to understand that those two separate devices are there even though they may not necessarily be physically separate. Just to really hammer this down, USB is the protocol, a USB Receiver receives the data (after it has "agreed" with the computer how it will communicate and drivers have been loaded) and the computer sends the data (in which case it acts as a transport). Section 4: Sample digital systems I wanted to take a little time to show a few "sample systems" and illustrate that they include all parts mentioned above. I will use only a couple of common components to illustrate this. *If the mods/admins or component manufacturers would like me NOT to use their product in this breakdown, please send me a PM and I will take it down, but considering this info is in other threads on this site, I hope that won't be a problem. System 1 Marantz SA8001 CD Player -> TOSLINK cable -> Stello DA100 DAC -> Analog RCA cables -> HeadAmp GS-1 -> Headphones Digital Media : Audio CD Source/Transport : Marantz SA8001 -> S/PDIF over Optical TOSLINK cable Digital Receiver : TORX optical module converts Optical to wire signal and connects using wires to AKM AK4117 S/PDIF receiver inside Stello DA100 -> I2S over PCB traces (must verify) DAC : AKM AK4395 DAC inside Stello DA100 I/V : AK4395 is Voltage-Out DAC -> Analog signal over PCB traces Analog Output Stage : OPA2604 Balanced-Unbalanced converter, 4x NE5534 low pass filter, discrete output stage (amplifier) -> Analog signal over RCA cables Amplifier : HeadAmp GS-1 System 2 Computer -> USB Cable -> Stello DA100 -> Analog RCA cables -> HeadAmp GS-1 -> Headphones Digital Media : MP3 files on hard disk Source/Transport : USB Host Controller on computer motherboard -> USB Audio 1.1 Stream over USB cable Digital Receiver : PCM2704 USB receiver inside Stello DA100 remainder is same as system 1 System 3 Computer -> ESI Juli@ sound card -> Coax S/PDIF cable -> Stello DA100 -> Analog RCA cables -> HeadAmp GS-1 -> Headphones Digital Media : MP3 files on hard disk Source/Transport : ESI Juli@ -> S/PDIF over Coax cable * Digital Receiver : AKM AK4117 S/PDIF receiver inside Stello DA100 remainder is same as system 1 *NOTE: Inside the ESI Juli@, the path is a little more complicated than the simplified version above. The full details depend on design in the card but the overall picture is this: The CPU processes some data and sends it off to the VIA Envy24HT-S DSP for finishing, through the Southbridge (ICH), and the VIA Envy24HT-S processes the data as configured by the drivers and card firmware, and then passes along via I2S to the AKM AK4114 digital transceiver to be output via coax cable. System 4 Computer -> ESI Juli@ sound card -> Analog RCA cables -> HeadAmp GS-1 -> Headphones Digital Media : MP3 files on hard disk Source/Transport : ESI Juli@ -> Internal I2S over PCB traces Digital Receiver : The Envy24HT-S DSP can output I2S directly to the DAC, thus there is no real "digital receiver" -> Internal I2S over PCB traces DAC : AKM AK4358 inside the ESI Juli@ remainder is same as system 1 Author's notes and requests 1) Please take the time to read the entire article (especially before posting a question here). 2) A few ground rules please: "What's better : USB or S/PDIF" is GROSSLY out of scope and purpose of this article "What's better : Sound card or DAC", RTFM before you dare ask this question! Whether "RFI concerns/issues" inside computers is "detrimental" to the quality of the sound will not be discussed, nor will there be discussions about "faults" of using an internal sound card as DAC vs just Transport. Before saying anything about Jitter, you must read all articles (Wiki and otherwise) linked to in this article, thoroughly. I do not want ignorance about this commonly misunderstood topic to play a part in any discussions here. Discussion of what is considered "audible" vs "measurable" is to be kept to a complete minimum or this rule will change to simply ban it. 3) Constructive criticism is always welcome, key word being constructive. I know I must have missed some things, please do point it out and I will update this article. I hope this article helps alleviate the confusion that seems to circle digital audio. Thanks for reading!