A DAC will sound it's best when isolated from all sources of noise. In the case of a coaxial signal, optical isolation eliminates galvanic conduction and source RF noise; well shielded coaxial cables limit their impairment as RF antennas; Faraday isolation of digital components prevents radiated RF noise effects; and ultra-low noise power (battery preferred!) at the DAC helps maximize sound quality.
Still to be considered, however, is the potential for leakage currents at the coaxial signal inputs. S/PDIF is bi-phase-mark encoded for a DC zero average signal value; however, transfer of electrical energy through the source blocking capacitor or along the dielectric may still occur. DC•BLOCK™ is a 1st order Butterworth filter integrated into a BNC adapter that stops this. Zero unwanted DC current flow into a DACs coax input means better sound. DC•BLOCK lets you extract the last bit of transparency. Install one on a single-coax 384k connection; install a pair on a dual-coax (DX) 768k connection. The performance of the digital transmission is not affected.