[Nexus 5 Accessories] mborzill:
"Sucks" is a subjective term, but I agree with Axel85. If you're currently getting terrible sound, a USB DAC is a costly hail-mary that likely won't solve your problem. USB OTG DACs are great way to salvage an aging phone as a media player or to bypass a damaged the 3.5mm output. Otherwise, they're a way to turn already "great" sound into "exceptional." I can say with complete confidence that, even over bluetooth, the Nexus 5's built-in audio is impressive. If it "sucks" on your setup, then you definitely want to ensure that the problem doesn't lie elsewhere before investing in a DAC. If it is, in fact, the Nexus 5, ship that sucker back to Google, because a DAC definitely won't help. Just be sure there aren't other elements in your setup putting the constraints on your sound reproduction.

Now if you're truly blessed (cursed?) with golden ears and an audiophile's insatiable desire for perfection, then "sucks" probably has a different meaning for you; Otherwise, it's best to rule out everything else before plopping down substantial cash on a USB DAC. On that note, the Nexus' internal DAC crushes any entry-level/ low-end ($30-$50 DAC), so you'd really only want to consider the next step up, and it is a big step in price. Great units from $120-$200 from Fiio or Cambridge Audio. I've heard the Audioengine D3 on a laptop and it was fantastic, the form factor is great, as well, but I haven't investigated whether it plays nicely with lollipop OTG. There are a lot of issues to consider -some are legitimate headaches. Aside from the additional clutter of more cables and another powered device, the effect on your phone's battery is not one to take lightly. You may be able to currently stream pandora all day long, but with your phone acting as a USB host, you have to be conscious of the potential power draw from any USB DAC. A big amplifier can drain that battery quickly without its own power source to supplement. Many DACs are even equipped with their own internal batteries, but regardless, the power question is not something to minimize. Depending on the unit, powered USB hubs and the right cables can provide an easy fix.

But before you go pulling the trigger on a DAC, let me suggest a few things and some troubleshooting steps...

On the software side:

Play with built-in equalizer/AudioFX/DSP (it may do nothing at all with your ROM & kernel). I also highly recommend that you try playing your media through an app called PowerAmp. If that doesn't give you the fidelity boost you're looking for, then give Viper4Android a whirl. It requires a slightly more complicated installation (depending on the ROM), and the tweaking can get advanced, but the results are truly impressive with the right music. "FauxSound" is a custom kernel I'm yet to experiment with because it's (currently) incompatible with CM12.1 CAF, but the reviews in the forums seem overwhelmingly positive. When it comes to sound, perceptible differences vary from person to person.

As to troubleshooting the phone's output:

It should go without saying, but if your factory head unit and speakers and are junk ...if music has never sounded good on your system, a USB DAC isn't the miracle worker you need. Spend the money on a decent head unit and/or upgrade your speakers. An underpowered, factory installed head unit can turn otherwise decent speakers into muffled distortion makers, so take stock of the equipment you're working with and manage expectations. If you're an audiophile, you can likely ignore much of this, but for the sake of anyone else in a similar boat, considering a DAC to improve audio, lets go down the troubleshooting checkbox:

1) First and foremost, check your source files. If you're streaming, make sure it's high quality. You may need to go into the app's advanced settings. For most people's ears, there are diminishing returns above 320kbps MP3 /256AAC vs. the storage requirements. With the right gear and the right source though, "lossless" music can bring out elements you never heard on your favorite tracks: fingers lifting and moving along frets, or a half-note you never caught. If your ROM is capable of natively playing 96000Hz 24-bit FLAC, by all means, give it a go (or any other lossless).

2) Test your 3.5mm headphone connection with decent pair of actual headphones. Still sucks? Spray the jack with compressed air and see if it helps. Try with another set of headphones. Try with a friend's car, try on your home stereo. Then connect to your car and compare. If it's worse, swap out the cable before anything else. Quality matters here. The difference between the the $0.99 cable you buy at the gas station and the $12 cable at BestBuy can be huge. A quality cable means one sheilded for interference with wiring and connectors made of materials that optimize conductivity (often a thin gold plating). Many are even cut specifically to ensure a solid connection through the narrow opening of an aftermarket case/protector. A better connection means better sound.

3) If all is well with the 3.5mm, plug it into your mobile charger. Audio still clean? If not, try another charger. Still sounding crappy? Is this limited to the car or did you hear it on your headphones? How about over bluetooth? If it's only in the car, and sound gets worse on the charger, there might be a ground loop somewhere in the car's electrical system (often this manifests as a high frequency whine that increases as you accelerate, or changes frequency when you turn on the A/C, headlights, etc). This could be as simple as something plugged into the cars cigarette lighter, or a bad connection somewhere in the vehicles electrical system... The problem is the "somewhere" part, and tracing it down can mean pulling fuses all day long.

3) If you connect over bluetooth (not optimal) perform the same tests. If bluetooth degrades audio quality significantly, then your car stereo may be on an older standard that simply can't operate at the bandwidth capabilities for high-bitrate audio. Aside from just not using bluetooth, there's no simple fix for this. If you dont get a drop in audio quality when connecting to another bluetooth device, then your in-car options are limited: connect via 3.5mm out, replace the head unit with a newer one, or install a bluetooth 4.0+ adapter to the car stereo's auxillary inputs. It's worth at least mentioning that, although unlikely, interference from other devices could be an issue. Anything that operates within the same wireless spectrum as bluetooth could be a source of interference. A bluetooth obdii reader, a wireless transmitter from a rear view camera, even other phones in the car that have been paired with the stereo.... Anything on 2.4ghz Normally, there's a preamble before transmission that keeps devices operating on these frequencies from interfering with each other, but if there's a bluetooth device in the vehicle on an early standard, that may not be the case. Also, if there's any USB 3.0 connection (powered hub, thumb drive) in close proximity to bluetooth, get rid of it or buy a shielded extension cable -noise emitted at the connection crushes bluetooth throughput and connection reliability.

Regardless, just make sure that the rest of your system is up to the task before investing in a DAC. Don't get me wrong, they are fantastic with the right gear, but each component of your setup can improve output as much as it can act as a bottleneck on the quality of the sound it reproduces. Make sure the investment is worth it by ensuring your system is ready for it. If not, put your money towards the fundamentals: Head unit + speakers.