All Ipod docks when connected to the Ipod via it's special connector handle the music after it's been processed by the Ipod's internal DAC,, which is not something great. Except the Wadia which bypasses that and takes the music before it is processed by the internal DAC, and then sends it to whatever DAC you have hooked to it. Denon came also with a similar principle, but as far as I know, only available in Europe. There maybe more now , I'm not following up onb that .Now what about the BDP-1 ? Does it bypass the internal DAC of the Ipod when connected by USB , or takes the processed signal ?