Hi Sir Louie. I think your Denon 4311 can handle the conversion to analogue. Sa pagka alam ko, high end av receivers have very good built-in DACs na. When the receiver is set to "Pure Audio" or "Pure Direct" mode in stereo, the sound quality is almost similar to that of an integrated amplifier. Your Denon's THD is 0.05% in stereo. Maganda na ang THD mo compared to integrated amps and Denon is also known for music.
Have a good weekend.
The built-in DAC for the AVR-4311CI is the AK4358. Though decent as a multi-channel DAC, it falls below the specs of what's typically considered an audio-grade product (at least what would be fitted in a product intended for HiFi). Marantz's entry level CD Player (CD5004) for example uses the CS4392 DAC, which supposedly has a wider DR (not that it matters with Redbook) and a 6dB lower noise floor.
The 0.05% THD spec doesn't say how good an amp is, as it's just Denon's threshold for their power rating. That being said, the measured bandwidth of most Denon AVRs is usually decent (wider than the audible band, but short of specs that's normally flaunted by dedicated audio gear), and the higher model ones can deliver good current when only 2 channels are driven. DF of their flagship model is almost comparable to an entry level SS integrated amplifier (measurements show that it's ~20% lower than Marantz' PM5004, for example), while channel separation and noise floor are normally quite a bit worse.
From a pure spec and electrical measurement standpoint, AVRs generally don't stand a chance against dedicated audio gear (at least SS ones). However, the counter argument is that these specs matter less than the actual system presentation (and I would normally agree), as the numbers delivered by today's gear is already plenty lofty (even at the AVR level). Most components nowadays have the capability to sound good, either with proper matching (for the processing averse) or through interventions (extensive processing capability is getting cheaper with every model refresh) as long as the design limits are not breached.
If you're wondering why I'm comparing with Marantz gear, it's because they're Denon's more audio-oriented sister company (aside from McIntosh).