Fast forward to around 24 mins mark when DMS and Z were discussing the DAC pushing hot signal into amp resulting in distorted bass. I wonder how that happened if the prevalent advice is to max out the volume at the source (DAC). Someone care to explain?
Max source volume is
not always the same as a hot signal.
If a properly designed DAC or CDP follows Sony Redbook standard then it outputs a fixed voltage of 2V, which even amplifiers made before digital audio wouldn't have a problem with.
Now, if you're using such a properly designed DAC with a computer, setting the OS volume lower will make its output lower than 2V, if you're even starting out with 2V to begin with since some DACs that have acceptably clean output have lower than 2V by default, ex. the Schiit Modi and Modi2, portable DAC-HPamps with line outputs, etc.
A hot signal is when you have an active preamp in the system prior to an amp that isn't a pure power amp output stage circuit, ie, it has its own active preamp circuit. Now you're sending a hot signal over 2V into an amp that will preamp that signal even further, and even on a 0dB gain the problem is you're already starting with a hot signal. In some other cases the DAC or even CDPs have an output stage designed for a hot signal output, like the SuperPro 707 which outputs 6.5V when using USB input and a power brick, which you may notice isn't being recommended to buyers anymore.
Other circuits like the preamp output on car audio receivers and DSPs have up to 4V output. Go to a car audio forum and you'll find 2V Denon and Nakamichi users on one side and everybody else on the other side, probably railing against ///////ALPINE for going down to 2V. The reality is they're both actually partly wrong. Yes, 2V signal is loud enough. No, just because a receiver or DSP can do more than 2V, it doesn't mean you'll never get a clean signal much less always get the rated 4V (most Alpines and Sonys, some Pioneers) or 6.5V (some Pioneers) or hell even 8V (Eclipse), since you're going to set the gain structure. Everybody using the over 2V receivers and DSPs for sound quality set ups will tune the gain structure based on audible noise, so chances are some of them aren't even at 2V if they're tuning the car with the engine off inside a building that isn't a busy parking lot (like the custom installer's shop after hours), everybody else who just wants to squeeze all the dB's out of their 1,000watt amps driving huge subwoofaz in gigantic fancy port enclosures wouldn't give a hoot about noise (and up to a point, not even clipping), so now they have up to 8V of a hot signal to work with for a lower sensitivity subwoofer trying to hit 150dB.
So again, if you're just using a computer with a DAC, OS at max nets you a ~2V signal. Using an active preamp between that DAC circuit and the active preamp stage of another amp is when you can get a hot signal...and then there's the question of how you find ~2V. This is why it's recommended to use max OS volume setting and not using two active preamps in the same signal chain. Even active monitors like car amps just have a gain setting on a knob as opposed to a switch as on headphone amps.
Again, think of Gran Turismo or Forza (or an actual car except you have to have a seriously set up car to be tinkering with this on a real car) transmission settings. The source signal is like the Final Drive ratio, the gain on the preamp (on the amp) is like the six gears, amplifier power is engine power. You can make the signal as hot as you want but if there isn't enough power it's going to distort and clip the same way that just making that visual graph for the transmission settings have steeper lines that reach up instead of the right side of the screen isn't exactly just going to give you infinitely better acceleration (except in this case the constant gear shifting can cost you as much as just staying in the meat of the power band on the engine for three gears down the straight or five gears on a quarter mile sprint) regardless of power, regardless of whether you're adjusting final drive (which affects all the other gears) or the six gears.
In short, confusing a max OS volume setting to mean it will make a hot signal is like assuming that you'll run out of revs at sixth gear, or that cranking up the stove to max will automatically burn a steak based on how you have to use lower heat because the soy sauce with glucose component marinade burns and thinking that anybody cranking up their stove top to cook a steak have no idea what they're doing (in reality, marinades just burn at lower temps, which is why this is used for thin cuts, and when somebody wants to use an Asian marinade to spice up a thick filet mignon, it's used as a finishing glaze during the cook-through phase after searing the surface).