Started listening earlier yesterday to AM after I picked up the new IPod Touch from my nearby Apple Store. I have been using a pair of Sony XBA-H1s and while I have no idea what DAC is in the device I can report IMHO that the sound quality is very good. Please give Apple Music a whirl at your earliest convenience when you get the new IPod Touch and let us know what you think. Also, I never really needed to raise the volume more than half way. Happy listening.