The USB output to your DAC (assuming it is a USB DAC with good implementation) is going to be galaxy away (superior than) running audio via the headphone jack out of your iMac. I have not heard of a DAC that runs from the 3.5mm headphone jack though. You might be confusing this with a different connection. To run your computer via a DAC the typical connections would be USB, or SPDIF (either RCA, BNC or Toslink). The 3.5mm headphone jack carries an analog signal (not a very desirable one either), and would not work via a DAC.
I'm using USB from my mac to the DAC. I also tried the headphone jack with a toslink cable to mini rca jack (the mac outputs optical from the headphone jack). Not really much difference. In either case an asynchronous dac will deal with any jitter issues common to both methods. For either method a good quality cable makes a big difference over the cheapo stock stuff.
Miewan - Thanks for the reply. After more thought on this, I don't think the output (USB or 3.5mm) makes a difference since the output is through a DAC before the preamp. The DAC I will use (TC7510) does not support USB, so I'll use the 3.5mm output and no need for a USB DAC.
Jax2 - A TOSLINK TO MINI PLUG CABLE ( http://www.cablestogo.com/product.asp?cat_id=2001&sku=27015 ) allows connecting to a DAC from a 3.5mm. I use this type of connection with Airport Express and TC7510 DAC.
Ah, forgot about the mini-Toslink via the headphone port. I haven't actually tried that except for with an Airport Express and it was absolutely terrible. But that is a different device. In that case it will depend upon the implementation of the USB with the DAC you are using. If the DAC has poor USB implementation you might try using a DIP/dejitter interface which can go between either USB or Toslink, but would require an additional cable. I don't have any experience with you DAC to say whether any of this would be worth it. If it sounds good to you, that's really what's important.
HDMI would be the better way to go.
I do not think Mac's have HDMI ... at least not Mac Mini's (unless the latest models do)
No HDMI connectivity on an iMac
The latest MacBook Pro Models (2010) provide an audio signal via the "mini display port". An adapter may be purchased that converts this mini port to a female HDMI. Just a thought for those who may not know... I am currently using my MacBook Pro USB output to send an audio signal to a Grace m902 headphone amp with a set of Grado PS1000 headphones. The sound is quite good...
They should have HDMI. I know you can get an adapter. But why should you have to? It needs to be connected to a TV at least. Does the mini display port pass audio? I'm sure Apple will catch up at some point.
Rwwear: Yes, the mini display port on the latest MacBook Pro model does provide an audio signal.
Good Tahoe, now you need an adapter and a DAC with HDMI in.
How would HDMI be better?
Pick up an asynchronous USB or FireWire DAC and jitter will not be a concern.
I am currently using the USB port out of my MacBook Pro (latest edition) to connect with a Grace m902 using Grado PS2000 cans. I realize there are limitations with this set-up but I am more than pleased with the sound playing FLAC files using VOX (a free app). This is the best I can do for the moment as I am currently in Kabul, Afghanistan...
HDMI has higher bandwidth than USB and transmits video. Firewire is on it's way out. You will not find a new processor with it. You may find it on a few DACs.
Hdmi is great for ht and multichannel applications, but I wouldn't use it for a 2 channel music setup. Some dacs use an hdmi connection for i2s, but that is different than your standard hdmi on a processor/receiver.
On The Mac, I would look into a USB to spdif converter which sounds better than the optical output in my experience. Even the inexpensive hiface sounds better than a glass mini toslink from my Mac mini.
I know most DACs that use HDMI for I2s only but they should use regular HDMI. HDMI will transmit SACD, DSD, DVDA, FLAC and every other HI REZ format I know of. USB is good but limited to what HI REZ formats it can transmit and so is SPDIF. Plus if you want to be able to use Bluray audio with your fancy DAC, SPIDF will not pass the uncompressed audio. This is the same for computers with Bluray drives.
I use the USB port of my mac to hook up my Amp/dac. Havent used HDMI yet.
Since the original topic is about 2 channel, I don't believe regular HDMI to be the better connection. It's just not necessary and it isn't a superior connection compared to other, less expensive to implement options. SPDIF, usb and firewire is fully capable of transmitting hi-res 2 channel formats. You can use a $40 hdmi audio de-embedder for SACD's and the uncompressed audio tracks on blu-rays and run the spdif output to your favorite dac if you must. You can rip the DVD-A's stereo tracks to your computer and play them through your dac as a file or burn them to a disc and play them through a regular dvd player.
What about Hi Rez Bluray audio?
If bluray audio catches on, then that would be great, but i wouldn't put any money on it at this time. Time will tell. I think hi res audio downloads fill this niche quite well. No need for encrytpted hdmi and multi channel avr's for those that are only interested in 2 channel music in high resolution formats.
There are also some great Bluray concert discs and methods for listening to them in uncompressed audio without hdmi. Check out the $40 hdmi audio deembedder from monoprice. Or, buy a bluray player with good analog outputs. I agree that HDMI has a place in HT though if you need video and multi channel sound.
Video is important with Bluray, DVDA and music/video DVDs.