iPod to USB help ?????

I see lots of these cords that connect to the bottom of the iPod or iPhone and send the signal to a USB input on computer. None of the vertical docking stations that I find have audio output or and only a few with USB output.

My ? is:

When one connects to the bottom of the iPod or iPhone, does it bi-pass the DAC inside the iPod and send it to the computer digitally, where then the end user can select the "soundcard" (external DAC) for the laptop to use for sound??

I hope this makes sense??
It does not by pass the dac. It does however by pass the amplifier section for the headphone. Wadia makes a device that uses the dock to bypass the ipod internal DAC. Google Wadia Ipod transport to find out more
Nieuwen is correct.

The Wadia iDoc is a great device to feed your DAC, and will produce good music IF ( and Only IF ) your DAC can work well with a high jitter source. ( The Wadia iDoc produces a high level of jitter )