If you feed a DAC with USB does XLR matter as much?

AES/EBU, USB, HDMI are simply different ways of how to connects audio gear and have benefits under certain circumstances.

AES/EBU is the professional standard used in studios with 110ohms impedance . The input of the DAC is transformer coupled.

USB is converted to I2S which is used inside the DAC for connections. This is done by a chip.

If you can use I2S via HDMI it might sound better than USB (or not).

In studios all digital gear is  normally connected to a master clock so the XLR connection is fine and has some advantages. For home use I would prefer USB or HDMI but it really depends on the specs of the gear. Listening will help to find what sounds best.

Does running XLR matter as much if you use a USB input from a streamer instead of an AES/EBU from a good transport?  

These things are independent and the choice for DAC input has no impact on the choice for DAC output.

Converting to i2s in a Matrix 2 first might improve it. No way of knowing without trying. Then you need a quality hdmi/i2s cable to realize any improvement.

These things are independent and the choice for DAC input has no impact on the choice for DAC output

True, but would converting to I2S be beneficial?  Is the added conversion worth the effort/cost?  Does the input of the Pegasus benefit from converting to I2S?  Guess I’ll just ask Musician to see what they say, but just thought I could get some good feedback here before doing so. 

Does the method I use to deliver digital data to my dac affect my choice of analog cables after the DAC does it's thing.  Not related if I understand your question

Well, yeah it does if the DAC processes one input better than another.  And that’s really at the heart of my question. 

Well, yeah it does if the DAC processes one input better than another.  And that’s really at the heart of my question.

No, you are wrong, it doesn't matter how well each input processes their independent signals they all have to go through the same OP amp output and to your power or pre amp. Therefore you should concentrate on matching your DAC output cables to whatever is receiving them.

Regarding AES/EBU most likely you will get better sound, the main advantage of USB is higher transmission frequencies. So unless you have files above 192kHz use the AES/EBU.

Converting worked for me with an Allo USBtidge. Equal with an American and improved with a Matrix.

No, you are wrong, it doesn’t matter how well each input processes their independent signals they all have to go through the same OP amp output and to your power or pre amp. Therefore you should concentrate on matching your DAC output cables to whatever is receiving them.

This is not entirely correct. USB is a data packet interface. When using this, the DAC has to un-pack the data and then clock the pulse signals at the correct timing and bit depth for the DAC.  This is essentially generating i2s data for the dac chip itself.

With S/PDIF, the data pulse signals are already clocked by the transport/source and the DAC just has to separate out the left/right pulses for each channel.  This is essentially converting the S/PDIF signal to i2s signals.  S/PDIF is a single data stream that combines the i2s information for both left and right channels.

So, if the DAC has a crappy USB receiver module, the sound quality could definitely be better on the S/PDIF or AES/EBU inputs. It all depends on what kind of USB receiver, what kind of clocks it uses and the quality of the power supply for this module.

In some cases (like the LKS MH-DA005 dac) the USB receiver module has been reported to be better than what can be sent over the line using S/PDIF or AES/EBU.

@auxinput Yes you are correct it's not set in stone which DIGITAL INPUT sounds best it's up to experimentation and cables etc., but the OP seems to think that inputs have an effect on which output cables (interconnects) to use.

They all go through the same output so it's not valid.

Got it.  Digital input independent of output.  Sometimes it takes me a while, and thanks for your help!  Still not sure if I should bother converting USB to I2S, but I guess that’s a subject for another day. 

@soix  Musician DACs recommend that you use XLR analogue outputs not RCA.

If you are using Computer Audio then USB will be your only choice for a digital input unless you put it through a USB/I2s converter, which I can't see being a great benefit as opposed to pure I2s but very few sources output I2s. Good luck to find one.

So if you have a streamer or cd transport try the other inputs they may sound better.

Good Luck.