DAC with volume control + Integrated Amp = bad?

I'm not sure I understand what your trying to do , but generally using a volume control on an inexpensive DAC is not wise. Your integrated amp will need "main in, pre out" connections to achieve this.

First - I would be less concerned with the chip than the overall sound. There is a lot more to a DAC than the chip. That aside, I would not be concerned about running a dac with a volume control into an integrated. Using the DAC at a higher volume control (3/4 full or so) will generally give a better signal to noise ratio, but the DAC should be set to a place where the integrated's volume is at a "normal" setting - not unusually high or low. Other than that, don't worry. (of course, a cheap POS volume control can degrade the sound, but that's for another day)

The new DACMagic Plus has a switchable volume control. Turn it on for use in a simple system driving powered speakers or an amp and OFF for running it into a preamp...a more traditional approach.
The vol control always controls headphone level, for which it has a 1/4" plug.

Preamps are the bain of high-end audio. I used to use a highly modified Mark Levinson #38 and I thought it was transparent. Not even close. Now I avoid them like the plague. Worse than digital jitter. They usually add more distortion, compression and noise than any other component.

When I need a preamp, I now use a passive transformer linestage. If they use decent transformers, these are better than any other passive or active linestage. Here are some versions:

http://www.audiocircle.com/index.php?topic=89744.0

If you do get a DAC with a preamp, make sure that the preamp/volume is really high quality or that you can completely bypass it when selecting line-out.

Going through 2 active preamps is twice as bad as one, which is bad enough by itself.

Steve N.
Empirical Audio