I have used both with the DAC1 and I can tell you that toslink, at least with the DAC1, sounds excellent. In a test, I used a basic toslink ($35) fed from a $250 Sony cd player to the DAC1, and compared it with a $250 highly regarded digital cable (Kimber Illuminations D60) fed from a $2,500 Proceed transport to the DAC1. I used the same cd (one of which I burned from the other) in each player and togled back and forth on the DAC1 between the two while playing them together. The sound was remarkably close and I would attribute the difference more to the transport than to the digital cable type. I continue to use both. While disparaged, especially since it limits bandwith at the extremes, I think Toslink is no slouch, at least connected to the DAC1 which may minimize differences. (Incidently the rest of the system in the test was highly revealing -- DAC1 direct to Pass Labs x150.5 amp (no preamp)
via Nordost Frey, to Magnepan 3.6's via Nordost Frey. Various power cables, conditioners, and tweaks used.
via Nordost Frey, to Magnepan 3.6's via Nordost Frey. Various power cables, conditioners, and tweaks used.