Gents - I think it would be awesome to use this thread to respond to the OP's question. Suggestion: debates about digital theory might be better staged in a different thread.
Back to the OP's questions:
That's correct. The PC's sound card would not be used in the scenario above.
You probably generated a diversity of responses in this thread because in PC audio / streaming, there as many options for your setup as there are stars in the sky. Not only have DAC manufacturers responded to the increasing demand for USB capable DAC's by flooding the marketplace with a mind-blowing number of options for folks interested in purchasing a DAC, but software manufacturers have also responded with a diversity of software products. So, some research beyond this thread is likely going to be your friend here. In other words, your decision - making might not be limited to which DAC to buy, but also:
- How are you going to create / buy / rip / store your music files?
- How are you going to move those files from a drive to the PC (will the files be stored on a network attached storage (NAS) device, or will the drive be plugged into the DAC)?
- What playback device will you use? Do you already have a laptop / PC on hand that will be repurposed for playback, or will you be purchasing a device?
- If purchasing a device (you might not need much of a PC for this purpose depending on how you use it, but whatever you use should be quiet if it'll be in the listening area, and some desktops and even some laptops can have audible fan noise), what's the budget? You also have a range of choices here, from a small form factor fanless device to an old beater desktop that you might find at a thrift shop.
- Will you be using the PC for controlling playback, or would your preference be a "headless" setup where the PC sits by itself somewhere, and playback is controlled by a device like a tablet / smartphone or separate laptop?
And in between these questions, there are many options and decision points, all of which have the potential to impact sound quality an budget allocation.
I'm probably - maybe like you - in the real world with budget, so here's what I've done:
- I don't buy gear new, so I browse audio sites (after doing my homework) for the best gear I can afford within my budget. This may also require some patience waiting for your preferred gear to hit the used market.
- You've already got a preamp, so my choice for DAC might not be ideal for your situation. I purchased a used Benchmark DAC 2 which can be used as a pre and a DAC. I love it.
- Incidentally - since I've been doing PC audio for a while - I also have the original USB DAC I purchased about 10 years or so ago: an Antelope Zodiac DAC, which was very well regarded when I purchased back then. Does it sound different from the Benchmark? Absolutely yes. Do I have a preference? While I have loved the Zodiac for many years, I must admit I like the Benchmark better for most (but not all) types of music. The Benchmark creates a wider / deeper soundstage, but for more intimately recorded music (jazz or folk) the Zodiac has its advantages.
What does this mean? Your choice of DAC might be influenced by what type of music you listen to the most. Yet another decision point.
- I used to use the PC for playback, and have a USB drive plugged into the PC. This is probably the easiest way to get started.
- I now use a purpose built operating system (the operating system can replace Windows on your PC) for the laptop called Daphile (I'm also playing around with Volumio at the moment) to support a headless setup.
Hope that info helps, and also demonstrates that there are a universe of options. Homework is helpful, but "analysis paralysis" need not prevent you from jumping in. Many of us started with modest setups which have evolved over time. So, make some well informed decisions that suit your needs, and jump in!