Which DAC is being used with Bluetooth?

Might be a silly question but when I Bluetooth from my phone to my Cambridge integrated Amp Cxa80, the Dac that is being used , is from the iPhone still right? I have a Wadia 171i transport that has a digital out to the DAC In The amp but the sound quality from the Wadia plugged into the amp just sounds slightly better than the Bluetooth option. I’m using a fairly inexpensive no name brand optical plug from the Wadia to the amp... would upgrading to a carbon AudioQuest coax cable from the transport to the Amp make a more noticeable  sound difference? (I have an AudioQuest NRG 3 Y power cable coming in the mail for my 1st power plug upgrade, hoping for sound improvement there too.)

My rig is CxA80 cambridge intregraded 120 watt to 4ohms amp, Dyanaudio DM 3/7 towers, Wadia 171i transport from
 the phone to the dac into Amp, Shunyata venom conditioner plug into $10 power strip with no surge protection.... ( surge protection is from the Shunyata plug) and a low grade Klipsch 12 in Sub( like $250 range from Frys, forgot the model).
Thanks for reading and any advice you can send my way.
Bluetooth would send the signal to a wireless receiver then to the Dac in your Cambridge the Bluetooth wireless signal is digital not analog.
So the upgraded DAC in my Cambridge is being utilized even when I Bluetooth? Ok thanks! 

Any ideas of why my phone plugged into the  Wadia transport, plugged into the DAC through an optical plug, only sounds slightly better than the Bluetooth option?

It sounds better because the wired connection is just a better connection. Bluetooth is about convenience more than sound quality. Also Wadia makes high quality digital gear.
I think that OP is saying that a pure digital non Bluetooth transport should blow away a Bluetooth DAC by a wide margin and he isn’t perceiving that as occurring.
  I am confused by his setup.  Where is the Bluetooth receiver here?  In the Cambridge Amp?  Then the Cambridge Amp must be processing both the BT and the digital signals? (Which means that it’s really a DAC/Amp).  I don’t own a DAC that processes Bluetooth, so I don’t know if these DACs process the Bluetooth signal with same chip as a conventional digital signal.
  I used to own that Wadi transport but sold it after a few months as I just wasn’t using it.  I remember that it made my iPod sound like it was on steroids 
Mahler- you are correct, I’m not seeing a signifigant improvement when hard wired into the Wadia, that plugs directly to the the DAC that is part of my Cambridge amp. The amp requires a Bluetooth dongle that plugs into the back, which is probably the Bluetooth server that was mentioned by 1 of the readers  a few entries back.

Does anyone reading believe that the minor sound improvement vs large sound improvement( that I was expecting) could be due to the low grade digital Toslink plug from Wadia to the Amp? I’m considering a $160 upgrade on a AudioReararch coaxial digital plug ( The Carbon) from the Wadia to my Amp, but I don’t want to waste the money if it will only be a minor sound improvement. ( Currently running a $20 noname brand Toslink digital plug frown Wadia transport to the DAC in my amp.

My bias would be no, the cable won’t make that much difference.  Of course, until you try it, we can’t know for sure...Can you by an expensive quality cable with a return policy?  Even if there is a restocking fee?  At least that way you would satisfy you curiosity.
  Does your Cambridge amp have a usb input?  If so have you tried comparing the phone without the Wadia plugged directly into the amp/DAC?  That would remove the Wadia from the equation.
I have plugged the phone  into the amp without the Wadia before, and it’s souds pretty crappy. The Wadia is difinately better than analog plugged in the front of the amp. So yeah I can look into returning a more expensive coaxial plug if it doesn’t improve the sound too much. 
That’s interesting I am guessing that the DAC in the Cambridge doesn’t do much in the way of jitter reduction and that the Wadia does.  That was my experience with my iPod and the Wadia as well.
well, if upping the cable doesn’t do much, it could be that the latest Bluetooth technology as implemented by CA is really good.