This is what you should go read -> Digital Audio reveiw
But otherwise below from Nad’s main site:
NAD’s Direct Digital technology is unique in both its extreme precision and in its speed. This advancement was first introduced in the NAD M2 Direct Digital Amplifier to worldwide acclaim. Now this innovative Direct Digital technology is available as a standalone DAC. Instead of using the Direct Digital processor to drive a high power output stage, we employ a line level analogue output that will perfectly interface with any analogue system with the M51 Direct Digital DAC.
How Direct Digital Operates
NAD’s technology uses a very powerful processing engine that operates at much higher speed and with much greater accuracy than typical Digital-to-Analogue converters. Running at 108MHz, the M51 resamples the incoming pulse code modulated (PCM) signal and converts it to a pulse width modulation signal (PWM) with a sampling rate of 844kHz. Operating in a differential mode with double precision, the M51 has state-of-the-art specifications for low noise and freedom from distortion. The extreme headroom afforded by the 35-bit architecture allows for a DSP-based volume control that does not reduce resolution. Even with 24-bit high definition signals, the output can be attenuated by 66dB (very, very quiet) before bit truncation begins.
The incredible precision of the M51’s processing engine gives music a vibrancy and transient accuracy that must be heard to be appreciated. The conversion process from PCM to PWM completely eliminates any jitter present on the incoming signal; again, offering state-of-the-art performance in this most important parameter. Due to the very high clock speed and mathematical precision of our reconstruction filters, the resulting audio signal is totally free of digital artifacts like ringing. A Pure Class A analogue stage with very low output impedance provides the perfect interface to your favourite amplifier. Also, both balanced and single-ended outputs are available.
Next Generation Connectivity
While the M51 includes the industry standard SPDIF, AES/EBU, Optical and Coaxial inputs, it also includes the latest USB technology called USB Audio Class 2. USB Audio Class 2 supports sample rates of 192kHz releasing the previous limitation of USB at 96kHz. A device USB port is included allowing direct connection of a PC or Mac.
The M51 offers two HDMI inputs and one output with video pass through. This opens up the possibility of using the M51 Direct Digital DAC as the heart of a “Video 2.0” system using the mandatory two-channel linear PCM soundtrack from Blu-ray or DVD to make a compelling two-channel high definition theatre presentation. Many symphony orchestras and some specialty music labels are also released in HD recordings on Blu-ray or DVD. The M51 is fully 3D video compatible but there is no surround sound decoding or video processing.
More than Just a DAC
M51 is a fully functional digital preamp with seven digital inputs and one of the world’s best volume controls. As a ‘preamp’ it is totally noise and distortion free because all switching and volume control is done in the digital domain. There are no analogue circuits except for the Class A buffer at the output of the DAC. While input selection is available from a front panel control, volume can only be selected via remote control. The supplied IR remote also features controls for NAD’s matching M50 Digital Music Player. Serial control is available via RS-232 IR and 12V trigger inputs allow the M51 to fully integrate with advanced automation systems.
The M51 introduces many ‘firsts’ for the DAC product category: first to support HDMI, first to support USB Audio Class 2 with support for 192kHz, the first to use digital error correction, and the first 35-bit architecture to be found in a DAC.
Whether you want to get into computer audio, ‘Home Cinema 2.0’ or just want to upgrade your CD player, the M51 Direct Digital DAC will get the best possible performance from every digital format. All this innovation, performance and flexibility come with NAD’s legendary sound quality and affordability.
NAD USB 2.0 Audio Driver for Windows PCs (XP, Vista and 7)
In order to stream your computer audio via the M51, ensure that the Sound or Audio device setting of your computer is set to “NAD USB Audio 2.0”. Download the “NAD USB 2.0 Audio Driver” (click on the downloads tab on this page) and install this driver to your computer by following the instructions provided. Minimum system requirement: Microsoft Windows XP Service Pack 2 or higher, Microsoft Windows 7.
Note: Any drivers previously loaded must be uninstalled prior to installing this driver
FOR MAC USERS
Minimum Mac OS X Snow Leopard (version 10.6) and later versions include USB Audio 2.0 drivers and therefore it is not necessary to install the NAD USB 2.0 Audio driver. Ensure the Sound device of your Mac is set to “NAD USB Audio 2.0”