I'm one of the beta testers and have done extensive listening to the
Touch and tried it up against several external DACs, but I don't have a
DacMagic so I can't give you the exact desired comparison.

I HAVE done a comparison with a PeachTree Nova which has a very good
sounding Sabre DAC. As comparison the sound from the Nova DAC when
connected to a SB3 is way better than the analog outs of the SB3, when I
hook the Nova up to the Touch the sound of the Touch's analog outs are
very close to that of the Nova DAC. The Nova is slightly better but not
by much. 

One interesting aspect of this is that the Touch has a much better
digital out than the SB3, and even with the Sabre DAC I can hear a
difference, the out of the Nova when connected to the Touch i sbetter
than when it is connected to the SB3. The upshot is that the output from
the Touch analog outs is actually better than the output from the Nova
when connected to the SB3! The analog outs of the Touch are that good.

My guess here is that the DacMagic driven from the Touch is probably
going to be pretty similar to the Touch's analog outs, it may be a
little better and it may not. You are probably going to find that
external things such as the cable used, length, AC mains condition etc
are going to have an impact on which sounds better. I will expect that
in some people's systems the external DAC sounds slightly better and in
some it does not.So I think you are going to have to listen for yourself
and make your own decision. 

Note that I actually prefer the sound of the Touch to the Transporter,
the Touch has no active circuitry after the DAC chip at all, the
Transporter uses fairly standard OP-AMP circuitry, which might be why I
prefer the Touch. 

John S.


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