The C5 has 4 line inputs and a MM Phono input as standard, and as such is a pure analogue device. Although there is also a digital input board in development we strongly advise against putting a digital item inside an analogue pre-amplifier or integrated amplifier, it will have a negative effect on sound quality. Digital items should be kept as far apart from their analogue counterparts. Hence a separate DAC will always sound better than an internal one.
The signal inside a preamp must be kept as pure as possible as any degradation at this point will be passed on to the rest of the system. A good pre-amp like the C5 is worth its weight in gold