I was discussing this in another recent thread regarding the Wadia 121 I just got. Here's a long excerpt:
There were some comments in another thread that using a dedicated preamp is preferable because digital volume controls degrade the sound, especially at low volumes. Wadia strongly disagrees with this. From the manual (which comes in pdf form on a flash drive):
"We strongly recommend that you use your Wadia 121Decoding Computer connected directly to your power amplifier. Even if you purchased your Wadia 121Decoding Computer with the intention of connecting it to your preamplifier, we suggest that you try direct connection to your amplifier. Many listeners are surprised by the improvement in performance over even the most expensive preamplifiers."
"Does the Wadia Volume Control compromise resolution?
The Wadia 121Decoding Computer uses the latest generation of Wadias proprietary digital volume control. The volume level can be varied in the digital domain by means of mathematical manipulation of the signal, eliminating the distortion and noise that are inevitable with even the best analog volume controls. While conventional thinking indicates that reducing the volume digitally can sacrifice low level resolution, Wadia has created an innovative solution. Wadias patented digital filtering algorithm produces a 32-bit output. This high-resolution signal is then used in the computations that in turn reduce the volume level. This new signal is fed directly to the DAC chips. Through this innovative method, the Wadia 121Decoding Computer maintains high resolution even at the lowest volume control settings."
"Can I bypass the Wadia Volume Control?
Because the Digital Volume control does not include any analog circuitry, there is none to be bypassed. Even the mathematical program step that performs the Digital Volume Control calculation is an integral part of the Wadia DigiMaster filter algorithm and therefore cannot be bypassed. If you do not need the Wadia Volume Control, set it to its maximum level on the LED display."