I need an app and a couple of bookshelf speakers

just use the analogue out. The XFI is pretty good and having a soundcard + dac is completely pointless.

No idea why some people spend tons on a Xonar Essence or similar and then hook it up to a DAC.
 
just use the analogue out. The XFI is pretty good and having a soundcard + dac is completely pointless.

No idea why some people spend tons on a Xonar Essence or similar and then hook it up to a DAC.

It's not at all pointless. Soundcards and their software offer a lot of features and functionality which you wouldn't otherwise get. Just one example is getting access to virtual surround technologies like Dolby Headphone and EAX for example. An Essence would obviously be pointless as I don't believe it adds anything except quality over the other models, but a soundcard itself isn't pointless. And what if you want to record, use a mic when playing games and so on? Much better than on-board.
 
For recording and such yes I can understand, but for the other "effects" and stuff I don't get it. I've had many soundcards and none of the effects provided as good imaging as my current DAC run through the onboard.

For general media use and games I think having a soundcard + dac is just a waste of money.

And using a mic while playing games? Onboard is perfectly fine for that.....
 
I don't understand why I need a DAC, surely an amp in this day an age does digital processing, and my soundcard can output digital?

You need a DAC to convert a digital signal from a PC or CD player/transport into anologue waveform to be amplified to line level. This can then be amplified to speaker level by an integrated amp or pre-power combo. Digital to analogue conversion is an essential part of any digitally based sound setup. You don't necessarily need a separate DAC as your soundcard or any integrated CD player will already have a DAC, but buying even a budget separate DAC like the beresford suggested above will improve the sound quality over soundcards and budget CD players. You also have the advantage of being able to connect any digital stereo source to the DAC, such as a sky box to improve it’s sound.

Stereo amps tend to be used with integrated CD players so they don't generally have any DACs because it will add to the cost and generally the DAC in the CD player will be better than the DAC in a stereo amp at the same price level, making it a bit pointless. Most advancement in Hifi gear isn't about embracing new technology, but refining existing technology and keeping it as simple as possible. Adding DACs when most people won't use them just adds to the cost.

But since more and more people are using PC's as their main source of music and the DACs in even the high end sound cards are quite poor, DACs are starting to appear again in a lot of stereo amps, especially in the £2000 price range. Look up amps by Moon, Naim, Cyrus, Musical fidelity, and Advance accoustics if you’re interested, though these wouldn't generally be classed as budget amps.
 
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