The Apple TV should stream your digital files. I stream my lossless ripped Cds from a Mac Mini to two 3rd generation Apple TVs and use the optical outputs into stand alone DACs. It works perfectly.
Does the LED light turn on when you access your Apple TV?
Your DAC has 2 optical inputs. Are you sure you have selected the correct input?
Does the LED light turn on when you access your Apple TV?
Your DAC has 2 optical inputs. Are you sure you have selected the correct input?