MacBook, old receiver, and external hard drives


I'm putting together a 2nd system with an older Denon 635R Receiver, 2 year old MacBook and two 1 Terabyte Hard drives that contain most of my music in a variety of formats (FLAC, SHn, mp3, AIFF).

I realize I need a budget DAC between the MacBook and the receiver (looking at the Schiit Bifrost), but not sure about the best way to access the Hard Drives and manage through the MacBook (without loading all the music on it).

Also, I'm reading other threads about limitations of the USB interface btw all these components, but don't quite understand that.

Finally, would it be easier to load up everthing on to iCloud for ease of access/storage?

Thanks for any help you guys can provide.
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First, what do you intend to use as your database music library manager
and playback software? If iTunes on the MB then it is rather simple at least
with regards to a single HDD. iTunes Preferences on your MB will simply
let you direct iTunes to your external HDD for the music file locations. If
your library is split between two librarys that is a different matter.

I am familiar with WAV, FLAC AIFF and AIFF audio codecs used for music
libraries. What is SHn? I tried to google a file extension of SHn but didn't
come up with anything.
First, what do you intend to use as your database music library manager and playback software? If iTunes on the MB then it is rather simple at least with regards to a single HDD. iTunes Preferences on your MB will simply let you direct iTunes to your external HDD for the music file locations. If your library is split between two librarys that is a different matter.

I am familiar with WAV, FLAC AIFF and AIFF audio codecs used for music libraries. What is SHn?
Thanks for your response Mwheelerk.

I do plan on using iTunes, but may augment with a budget "skin" that will improve playback quality (recommendations welcome).

I understand that its best to use different formats for the MacBook input (firewire from Hard Drive) and output (asynchronous USB to DAC)?

Any take on the Wyred 4 Sound uDAC?

BTW, SHN is this: http://en.wikipedia.org/wiki/Shorten
Create a new iTunes library on 1 of your external hard drives. Move all of the music into that library (on that drive). Use the second drive as a backup, I guess. I use Audivarna+ on my MacBook and PureMusic on my Mac Mini for playback. Both are excellent. For some reason, Audivarna is glitchy on my Mini, but it works great on my MB.

For the money, the Schiit Bifrost gets fantastic reviews. I've never heard it myself, but that's where I would start if buying a new budget DAC. Asynchronous USB DACs work great, in my opinion.