Yes, this will work even with digital volume. The balanced input on my integrated amp will overdrive with more than 3 volts or so. Since most balanced outputs are 4 volts or more, I use the digital volume control in the dac to reduce the output gain by 6 db (or 1 bit). Yes, you are throwing away 1 bit of information if using a 24 bit volume control, but it is not audible to my ears with the two dacs I have tried this with.
I may be wrong, but here is how I understand it if listening to 24 bit material. 24 bits is equal to a SNR of 144 dB. Pretend your dac was cabale of a SNR of 120 dB after the digital to analog conversion which is equal to approximately 20 bits. If you're only throwing away 1 bit of info, you still have 23 bits to work with which is still greater than a SNR of 120 dB or 20 bits.
Short answer, it works and it works well in my experience if you plan to reduce the volume slightly to adjust the output gain.
I may be wrong, but here is how I understand it if listening to 24 bit material. 24 bits is equal to a SNR of 144 dB. Pretend your dac was cabale of a SNR of 120 dB after the digital to analog conversion which is equal to approximately 20 bits. If you're only throwing away 1 bit of info, you still have 23 bits to work with which is still greater than a SNR of 120 dB or 20 bits.
Short answer, it works and it works well in my experience if you plan to reduce the volume slightly to adjust the output gain.