Hi there

I have this current setup:

Amp: NAD316BEE 2x 40 Watts
Speakers: Boston Acoustics 26A
Sansa Fuze DAP (Rockboxed for FLAC support)

My problem is, that I have to turn my volume dial WAY up on the NAD amp (10 o'clock for normal listening, 2 o'clock for loud, but comfortable, listening).
I am guessing that this means I am compromising the quality of the FLAC-files, since I don't have to turn the volume up quite as much when a computer is connected and playing the same files.

Does the low audio output from my DAP's headphone output take away quality from the audio being played or is it just my ears experiencing placebo effect?

More importantly, what are my options in regards to getting most out of my FLAC-files and get a better (louder) output from my Sansa Fuze?

Should I:
1. Be looking to buy a DAC to use between the Sansa Fuze and my NAD amp?
2. Not worry about audio quality and just keep turning the dial to 2 o'clock?
3. Forget about using the Sansa Fuze DAP and get a dedicated computer to play my FLAC-files (I want to avoid this option unless it's the only option)?
4. Get a Sansa Fuze line out cable like this one: http://www.ebay.com/itm/7N-OFC-LOD-Line-Out-Dock-Cable-Sansa-Fuze-MP3-Player-To-Headphone-Amplifier-/170683120910? I can't find any sources that actually claim this solution produces better quality sound.
5. Look at other options?

I would really love to keep my Fuze player, but am willing to change if I can get a significant increase in sound quality.

Thanks in advance!