My set-up is: iTunes on a Mac Pro --> Optical output --> External DAC --> Amplifier --> Speakers
Note that *most* optical outputs are only good up to 96kHz sampling rate. Some will play 192kHz, but I've been told it's very spotty: Some do, some don't, some do it unreliably. So you might want to consider a USB connection to your DAC instead, which can pass 192kHz reliably.
I'd like to let the DAC handle the processing. What I need is a player that will read the file and output bit perfect at the correct frequency. I have read that JRiver MC will do that, correct?
Yes. As you previously indicated, MC will set the sample rate and bit depth for each song as MC plays them and send them at their native rate to your DAC. Of course your DAC must support these rates in order to play the files. If there are some rates your DAC doesn't support, you can individually configure each sample rate to be converted to another. For example, with my DAC, I have everything above 192kHz set to down convert to 192, as my DAC doesn't go any higher than that. Everything else gets passed through at the original sample rate.
I also need to continue using iTunes to sync with various Apple iPods and iPhones. Can JRiver MC and iTunes work from the same directories of music files without getting in each other's way? My music collection is too large to have two copies on my hard drive.
That can get kind of sticky. Especially if you are using itunes to change tags. I've never tried this as I dumped my last i-device years ago. I'm an Apple fan, but their closed ecosystem on the i-devices makes it difficult to work with.
Anyway, you might want to try some experiments. Maybe make a copy of 30 to 50 of your favorite albums to a new folder. Then have both MC and Itunes use this folder as their source of music. In MC this is trivial. I'm not sure if you can set up a new separate library in itunes. I *think* you can, but I can't remember how.
It's also possible to export files from MC into a temporary directory each time you want to sync. Then have itunes pick up those files and sync them to your i-devices. Again, you'd need to experiment as I have ZERO practical experience with this.
Feel free to ask more questions.
Good luck.
Brian.