Flaws in this chain?

Yes, jitter was the #1 issue which is why I'm glad they have figured it out in well designed modern dacs that have been made in the last 20 years or so.  Actually longer than that but I believe dacs have improved in the last number of years but that's just a belief if I had to pick a well designed dac from the 80's from a newer one in a blind test I doubt I could. I have listened to files that have jitter in them which can be found at various sites like hydrogen audio, AES etc.. and I have never heard jitter in my system.  So if I don't hear it, I don't worry about it. 

Sound on sound has a good article "Digital problems, Practical solutions". In the section on jitter the bottom line is it just isn't a  practical problem anymore and this article is 10 years old. If you are slaving multiple A-D converters then use an embedded external clock. 

Listener fatigue. Ever experience it? Excessive jitter was the culprit for me a number of years ago. Since that time I’ve paid close attention to eliminating it as much as possible. Never again experienced listener fatigue in my home. DACs have come a long way, yes, but feeding a DAC a low jitter stream can help performance. IMO of course.

That's good to feed a low jitter stream but modern DAC's don't use the embedded clocking information from the incoming stream they use removal systems to isolate it from the reconstruction clock in the converter. If you can hear jitter and it bothers you then use whatever you need or want to me I don't hear it so I don't worry about it. 

I am no expert by a LONG shot which is why I try to read as much as possible from those who are. I could be wrong and would be the first to admit it but the way I understand it is the digital stream , the 1’s and 0’s, are sent to the DAC that converts to analog, as long as those 1’s and 0’s get there the DAC reconstructs them using it’s clock since the embedded clock information and any jitter that was sent in the stream has been isolated out. If the 1's and 0's don't get there you have a bigger problem than jitter and it's pretty easy to hear if the information does not arrive.