Benchmark has a good wiki with regard to outputting digital audio from a
computer.  On the following page they graph the distortion that iTunes
creates when the volume is less than 100%:

http://extra.benchmarkmedia.com/wiki/index.php/ITunes_Distortion_Measurements

I do not know how the SB3 handles digital volume adjustments and
whether it suffers from the same problems as iTunes.  

If the external DAC that you mention has a volume control, it may
alleviate the issue with iTunes.

Hope this helps,

Will


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musiklov3r
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