you use a DAC with a PC (USB) or Digital out, or with a phone which has USB digital out (nokia n8). to get a line out signal.
a DAC usually gives you one of the best line out signals you can get, this of course all depends on the quality of the DAC.
the best one Fiio make is the E17. their mid range one is the E7.
setups go like this
PC - DAC - AMP - HEADPHONES
PHONE - DAC - AMP - HEADPHONES
IPOD - LINE OUT - AMP - HEADPHONES
the E7 is a portable amp/dac, but it can only do one at a time. if your never going to use it as a DAC then sell it and get a E6/E11.
The E17 still has not been released yet, it has been in the pipeline for about a year.
http://www.head-fi.org/t/537356/fiio-new-products-guide
basically the E7 is the best DAC fiio currently make soon to be surpassed by the E17.
you cannot use DAC with an IPOD as far as i am aware. anyway its a lot of bulk to be carrying also if you dont use it for DAC.
get an E6/E11 if you want an AMP.
get an E7 if you want an AMP/DAC (will need another amp when using as DAC)
now the amps you couple with the DAC can be portable or not depending on where your going to be using them.
in the home the best combo is E7 and an E9, on the go the best combo is an E7 and an E11.
anyway mate, it sounds as if you bought the wrong thing, you need an E6 or an E11.
Hi,
I'm currently looking to buy some new headphones and probably an amp afterwards. I'm pretty new to all this I've never owned high quality headphones nor an amp or DAC. I made a thread on Head fi, if you don't mind could you take a look? My last post especially.
http://www.head-fi.org/t/579960/headphones-advice/15
Thanks