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What are you using for your DAC?
In both cases I am using the internal DAC of the surround processor. I don't know what the Onkyo has, but on my multi-channel setup it's a Marantz and it has a very good one. The beauty is that you get rid of a whole link in the chain, though I'm sure with a good enough one it'd be worth a separate box. In any case, for digital listening (lossless) I like the simplicity.