Steve,
Over at Head-fi, like you, they don't think the stock headphone out on the Dac1 is much good. It sounds fine to me. I seem to be the only one who has no issue with it, and I've compared it with a couple of good headphone amps I have on hand. What do you think is wrong with it and how do you improve it?
Like most things, until you have heard a good head-amp, you dont know what you are missing. I recently compared my modded headphone out to the Grace amp/DAC combo. It absolutely killed it. No contest. The only thing I have found that is close is some of the Ray Samuels amps.
What is wrong with the headphone circuit is a bit technical, but here goes:
1) the pot is not isolated from the op-amp feedback loop, so it reduces the bandwidth and introduces noise
2) the signal return paths are very indirect due to ground-plane splits, so this introduces noise and crosstalk
3) the op-amps are not good ones
4) the power delivery to the op-amps is poor IMO
5) the headphone driver devices have poor power delivery
All of these things contribute to make the headphone output undynamic, unextended, phasey and unfocused. It may sound half-way decent in the midrange, but the top and bottom are broken IMO. Imaging is only fair.
Steve N.