I'm currently using a Marantz SA8004 as my CD player but wish to use as a dac...however doesn't convert flac files, it will only accept hi resolution files through the optical or coaxial inputs, above 96 kHz.
Not sure of toslink and its capabilities above 96kHz, but coaxial as I understand does well.
My question is if I'm going to store hi-res files on an external or internal HD, what sound card do you recommend for a pc use, or what external dac is recommended that will output resolutions above 96 kHz via coaxial digital?
Is there another desired format to convert flac files to?
I'm sure these are basic questions but I'm after optimum SQ.
The Marantz digital inputs aren't identified in the user manual (bad Marantz...), but will be S/PDIF. This is a very common, well understood, simple, serial, linear PCM data transfer format. The manual does say:
"Linear PCM signals with a sampling frequency of 32kHz, 44.1kHz, 48kHz, 64kHz, 88.2kHz, 96kHz, 176.4kHz, or 192kHz can be input into this device".
It is quite likely that your existing PC sound card has a coax S/PDIF output. You should be able to connect that directly to the Marantz coax digital input with a suitable cable.
You will need something to convert the FLAC format into the linear PCM. Most music player apps will do this (and convert MP3, WMA, AAC, OGG, etc. formats you may also have). MediaMonkey and MusicBee are two popular media managers/players.
However, this is not your only choice. If you use the above media players, they both support UPnP/DLNA streaming. So, you can add a UPnP/DLNA Digital Media Renderer (DMR), and stream media to it from your PC. Since your CD Player is doing the DAC work, you only need the DMR to add the wifi streaming transport, and media file decompression to PCM. You will need a DMR that provides an S/PDIF output, of course (preferably coax, since TOSLink is generally limited to 96kSa/s).
Depending on how much you believe in the need for oxygen-free unicorn hooves, and unobtanium interconnects, you can spend as much as you want. Or you can buy a £20 DLNA DMR with optical S/PDIF output. The latter might be a way to experiment with streaming (i.e. to see if it meets your desired sound quality), before you go looking to spend a lot more money. If you're concerned about the quality of the digital decompression, I'd suggest that most of the cheap things will be using the same ffmpeg open source media library that will be used by the expensive equivalents.
The next step is to take the PC out of the loop, and store all your media on a NAS, using the PC only to manage your library. Then you can use a tablet or phone-based Digital Media Controller (DMC) app, to control the Digital Media Server (DMS) in the NAS to stream music to the DMR. No power-sucking, noisy PC needed anywhere near the listening room. Just a little, low-powered NAS, sitting quietly somewhere out of the way, connected to your wifi router.
I use BubbleUPnP as a DLNA DMC/DMR, running on Android phones, tablets and media box, accessing a DLNA media server on my NAS. I also use a cheap Win8.1 tablet, running MusicBee; this is preferable to DLNA, since it can access my NAS as a file server, keeping its own library database, and is able to run an Auto-DJ function, playing tracks at random. All of these DMCs can stream to the various DMRs I have around the house; one DMR connected to my Arcam system, one little £35 Android media box (using the Bubble DMR) connected to the TV via HDMI, thence via optical S/PDIF to an Audica AVR-1 and CS-LCR1, or to the Denon DRA-N5 streaming amp in the bedroom.