Can DAC with volume control act as Pre-amp?

I don't know very much about the Audioengine DAC. I'm not sure if the volume control is digital or analog. If it's analog, I doubt it would be better than a dedicated preamp or an integrated amp's volume control.

If it's digital, I wouldn't go straight into a power amp for any length of time. Digital volume control adjusts volume by altering the digital stream. It's only bit perfect when at full volume.

Most DACs I know of that have volume control have the option to bypass the volume control with a fixed or variable output setting.

If you're on a relatively tight budget and want the best sound for your main rig, you may want to get the best integrated amp you can afford. If its for background listening/second system/etc., the DAC into an amp may be good enough.

Just my opinions. Many will disagree. Other than for headphone use, I'm really can't see what the big deal is about DACs with preamps built it. Not to be confused with preamps that have a DAC card in them.

I do have some experience with this type of thing. Can you tell me if the volume control on the dac is digital or analog, and also, how you connect the dac to your pc. (USB, Toslink, ect.) We need to know this first because you will have different options depending on how
everything is connected.

Do not underestimate the advantages of a good quality integrated amp; no impedance issues, one less interconnect etc. usually translating to less hassle, more bang for your buck-but yes, less flexibility.
When looking at budget DACs with volume control, it is important to know how it is implemented, e.g., gain or no gain, digital vs. analog attenuation, and the quality of the analog potentiometer.
I have no experience with the Audioengine DAC, but I did have the Nuforce uDac I in my budget office system for a while. Although it uses an analog volume control, there was a huge improvement when I bypassed it (turned to max) and inserted an Axiom passive preamp for volume control.
If you are going to use a laptop as a music source, I strongly recommend DACs that focus exclusively on USB input and use asynchronous chips/DAC implementation or the CEntrance method (which Benchmark uses).
I replaced the uDac with HRT music streamer II, and I'm amazed how good that little DAC sounds. No volume control though.

That is how we setup the Antelope Zodiac Gold that we used in the Earo room at the last RMAF show.

The Zodiac Gold DAC was used as the preamp for the USB input from the mac laptop and also for the analog RCA input from the phono stage. The preamp and volume control are entirely on the analog side, which sounds great and preserves bit resolution.