Do we really need a audio processor ?

As mentioned before I have also heard DACs with volume control being directly connected to the power amps and sounding good too (in a stereo setup).

A PC environment is considered to be noisy. It took a long time for people such as Asus to deliver a card that can overcome the noisy environment and deliver near bit perfect audio signals.

The best method would be a sound card, connected to a external DAC, connected to a integrated analogue amplifier. That way you are limiting each unit's function to what they are good at.

DACs are now very small units. If you add a pre-amplifier, pot and other paraphernalia, you will again attenuate the sound signal, and allow noise to creep in.

Cheers
 
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