Yes, and preferably a USB DAC to skip the computer soundcard
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Yeah you pretty much do. You need something to convert the digital to analog. You can either:
1. get a USB DAC, which are spouting up everywhere,
2. get some kind of computer soundcard (internal or external), or,
3. a USB to S/PDIF converter that can then be connected to any DAC that has
S/PDIF input (which most do).