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As a general rule though one should avoid digital manipulation completely and remain in analog whenever possible (can you tell I own vinyl and a turntable? ). As for CD's one DA conversion is bad enough for music quality so putting music through an additional AD/DA conversion just for EQ obviously invites all sorts of digital error introduction (quantization, jitter, etc.)
For JimJ. I guess you like your analog EQ and don't find it causes the problems that the dogma dictate? Mind if I ask what you are using?
But from a CD player or music server, feeding a digital signal into a unit similar to the Behringer DEQ2496, which would perform EQ and then DA with its internal DAC, would be the better way to go.
Wonder if the DEQ2496 can output digital signal to another DAC? In any case, based on its rough studio rack design I wouldn't personally consider using it as an EQ in a home stereo.
SRB... so are you really using an HTPC as a music server for digital wav playback? How's that workin for you? I'm a PC too but wouldn't use a computer as a music server, it's just too noisy electrically and mechanically for me to ever consider it audiophile grade.