The pacific microsoft pmc 100 chip is in the dac.Or in the dac section of a player.So if you're using coax out,the dac must have the chip.Same for 24/96.Burr Brown chip.In the dac.Each of these chips are an improvement.The B B chip being the much better of the two.I wouldn't worry about hdcd,it has slid into 2nd place--and by a wide margin.