As to your last question, you will know if a DAC can handle DSD streaming if the manufacturer states that in the DAC's specifications. A year ago, the DSD-over-PCM standard was just emerging, so at that time no DACs supported it. Many new DACs do, however, and some "older" programmable DACs (e.g.- the dCS line) are incorporating the feature. A DAC may even be field upgradable to support DSD. Check with the manufacturer. Don't worry about rushing, though, because at this point hardware is well ahead of software. Very few DSD downloads are available; the preponderance are still PCM. Hopefully, this situation will change as DSD-equipped DACs gain market share.
DSD (Direct Stream DIgital) is simply an alternative method of encoding audio as digital data. It samples the analog waveform at 2.8224 million times per second (compared with the CD sampling rate of 44,000 times per second), and encodes the amplitude information with just one bit (compared with the 16-bit samples of CD-quality PCM audio).
DSD has several inherent advantages over PCM.
There's a complete description of DSD (and PCM) in my book The Complete Guide to HIgh-End Audio.
Robert Harley has written a detailed description of DSD in TAS, so I would leave the technical description to him.
But, you have got some major bits of misinformation...
DSD is not and will never be a "de facto standard." Is is an alternative high resolution format to PCM, not a replacement...
It has NOTHING to do with wireless.
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