I have been reading about DACs, and hifi in general in an attempt to learn how to optimize my sound system. Unfortunatly, I still am not sure what to do. 

I have a custom built computer that I use for gaming and music listening. I use iTunes because it's easily syncs to my phone and iPod. Unfortunately, most of my music is mp3. From now on I plan on only using lossless. 

I have a videocard which runs kind of loud but no sound card. 

The computer is connected to an older receive, NAD 7120, via headphone jack to left/right RCA. The receiver powers Polk Monitor 70 floor speakers.

i also have a pretty budget conscious record player, Audio technica At LP60, or my limited but growing vinyl collection. 

 

Bacically, I'm just looking for advice on how to optimize my set up. Do I need a sound card? External DAC? Is there a better way to connect my PC to receiver? I don't mind spending some money but I have a fairly small budget right now. 

Thanks for any help!

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