Nowadays there's a lot USB DACs and even USB Turntables with good audio quality out there. Here's one at a good price:
http://www.audio-magus.com/DAC707_Super_Pro_p/dac707.htm
What that means is that the audio signal from your computer is sent via a USB port in pure digital form, bypassing any soundcard you may have. It is converted to an analog audio signal using the external DAC, isolated from all the electrical noise inside the computer.
The inside of a computer is electrically a very noisy place, and the power supplies are full of digital noise from the processor, disk drives, and other computer components. Sound cards can transfer that noise into their audio output. Many people also experience "hum" from ground loop problems when connecting their sound card to their stereo.
Anyone who has been seriously looking at the performance of sound cards can tell you that what comes out of the S/PDIF output is probably not a very "clean" copy of the original. Many of the most popular soundcards perform all of their internal "processing" at a 48 kHz sampling rate, which is not the rate that most music (MP3's & CDs, for example) are recorded at. This means the music undergoes a sample rate conversion, which introduces a significant amount of distortion.
Also, when you use coaxial SPDIF, you are connecting the computer's ground to your stereo system - not a terribly good idea. Almost every USB DACs incorporate isolation circuitry to keep the computer ground separate from the analog output.
Anyway, Itlldue if want a good coaxial/optical/SPDIF DAC on a budget the Behringer ULTRAMATCH PRO SRC2496 is imho the answer:
http://www.behringer.com/SRC2496/index.cfmBtw, Elroy's Zhaolu 3,0 can be plugged to a comp via TG-Link high-speed buffer input.