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I'm not sure what a "level line-out port" is, sorry. I usually plug it into the normal headphone jack on the bottom of my laptop. Should I buy something different ? I'm not really an expert, which is why I came here to see what would be best to get.
Also, I have a Y-splitter. Should I just use that? I had the mindset that if I used that it would take some power away.
Ah, your laptop won't have a line-out port, so that doesn't really matter. Some PCs do, but laptops usually don't.
The y-splitter shouldn't cause any problems, other than the annoying second plug dangling off of it. It'll only suck more power if you plug a second pair of headphones into it, if I understand correctly. At least, it doesn't cause me any problems.
And well, if you want to buy something else, it all depends on how much you want to spend. A Fiio E7 would greatly improve the sound output of your laptop, but it costs around $100, so it's not really cheap (though compared to the other USB DACs on the market, it's a bargain). It also works as a portable amp, and sounds a lot better than the E5. You should research it a little and see what you think, at any rate. There are quite a few reviews on head-fi for it, and it has quite a following here.
If you don't know what a DAC is, "DAC" stands for "digital to analog converter." It basically just converts the digital signals from your computer into analog signals you can hear. The amps in a laptop are usually not very good, so an external DAC/amp is usually the only way to get really good sound from a laptop.