Wireless Slim Devices Squeezebox performance

Is the Squeezebox meant to take digital information in wav-formated files from your remote hard drive and feed it to a DAC for analog conversion? Does it involve your computer soundcard, which is typically not at audiophile quality level.

I am not interested in using the internal DAC of the Squeezebox. It would be nice if the Squeezebox could wirelessly transport digital data from your noisy music server located away from your stereo system, and merely hook it to your external DAC. Thanks.