There are many good USB DACs out there as well. But do your reading, as many DACs have poor USB implementation. However, good USB implementation has been found by many to be preferable to Toslink with many DACs.
You should also download a "more audiophile" music playback program than iTunes, although many of them still use iTunes as a front-end interface. This is not an exhaustive review, but Bitstream is the cheapest, and many people like it. You can download it for $10 from the App Store. I use Pure Music on my home computer and Audirvana on my laptop. They each have their pros and cons, but I think I like Audivarna slightly better. Decibel gets some good reviews, and Amarra is considered by many to be the best (or at least the most expensive).
When ripping discs with iTunes, make sure you have the error correction on. Some people prefer using other programs, like Max or XLD to rip discs. I think iTunes works fine.
You should also download a "more audiophile" music playback program than iTunes, although many of them still use iTunes as a front-end interface. This is not an exhaustive review, but Bitstream is the cheapest, and many people like it. You can download it for $10 from the App Store. I use Pure Music on my home computer and Audirvana on my laptop. They each have their pros and cons, but I think I like Audivarna slightly better. Decibel gets some good reviews, and Amarra is considered by many to be the best (or at least the most expensive).
When ripping discs with iTunes, make sure you have the error correction on. Some people prefer using other programs, like Max or XLD to rip discs. I think iTunes works fine.