Dac suggestions to pair with Squeezebox Touch

Well I found a nice improvement with the CIA PS. Not earth shattering, but money well spent IMHO.

Shakey

a little cleaner top end and generally smoother frequency response. This is not a night and day difference but a matter of subtle degrees. Tough to beat combo for the money.

The Bifrost is intriguing. Here's a recent review:

http://www.head-fi.org/products/schiit-audio-bifrost-dac

Been running my new Bifrost for close to 24 hours now. Sound quality is definitely superior to the DAC inside the Touch. Much more detail, and great imaging. Very smooth also, with no graininess that I could detect. Bass is a little on the light side, but this could improve with further burn-in. In all, very satisfied with this purchase.

It's probably worth weighing in here that an outboard DAC is only as good as the connection used. The right SPDIF cable can make a DAC you thought was "just OK" sound damned fine. The key is finding the right one. I usually pick the manufacturer's collective brain for a place to start. If they'll tell you what cable was used to voice the DAC, you can achieve some amazing synergy. This could be one reason the Squeezebox's internal DAC beats so many previously respected outboard DACs and why some disagree with others' comparisons.