The only reason I question a DAC at all is because so little of my music is currently in lossless. I have very few CDs to re-rip. I sold them all before I knew what I was doing conversion wise. The bulk of my collection is 192kbps mp3s. I can't help but wonder if even an S300iu can help such low-rez files.
192 Kbps MP3 is considerably inferior to 192 Kbps AAC, but to get around this you'll have to re-encode from the source. But I wouldn't even suggest a DAC in either case... it's not going to help improve the garbage that is 192 Kbps MP3, and it's not necessary for MPEG-4 AAC. It's not because AppleTV is an inferior product. It's because the formats used, and your own ears, are not going to be able to discern the difference.
Unless a substantial portion of your content is all recorded, mixed and mastered to a 24-bit Linear PCM format, you're using content that won't significantly benefit from an outbard DAC.
How did the idea even enter your mind? Did you read about DAC's in Stereophile magazine? Let me start by saying that audiophiles are the last people in the solar system you should listen to when it comes to audio equipment. They're all victims of confirmation bias. Pardon the bluntness but you have no idea how many times I've heard people ask this stuff and invariably I find out they've been brainwashed by audiophile morons who insist that their ears can tell the difference between Lossless and AAC when their brain can't tell that motion pictures are just a series of still frames changing 24 times a second!
Take it from me... I engineer, mix, master and market my own content in 24-bit Linear PCM format. Even if you encoded everything not just in lossless but in 16-bit Linear PCM format, I'd tell you to save your money. There's no reason for an outboard DAC in this day and age.
What exactly are you trying to achieve? Jitter mitigation? Jitter has not been a problem for digital systems since the mid-1980's. Almost all DAC's, even the cheapest ones today, resolve this problem with proper sample & hold buffering and internal reclocking of the signal. Alias filtering? Aliased frequencies are only a problem if the sample frequency is below two times the Nyquist limit (in this case, the upper end of the A-weighted range). What's more, most mastering processes include a 20kHz lowpass filter to ensure that any frequencies capable of generating aliases are filtered out of the master recording to begin with!
Give yourself and your pocketbook a break... The AppleTV handles content up to 16-bit Linear PCM just fine. Just feed the optical straight to the receiver and let your receiver do the decoding. If the Sony PCM-F1 processor was sufficient for professionals in the early 80's, I'm sure whatever receiver you are using today has DA converters that are more than adequate to reconstruct the signal with imperceptible artifaction.