apologies, i probably did not phrase the question correctly.
The ipod as a transport bit is clear enough and yes, I have looked the various options (pure, wadia, cambridge audio etc) for a digital out. All of these are desk based solutions.
I am looking at a portable setup i.e ipod/iphone -> connector -> portable dac& -> headphones.
From what I have read so far this does not seem to be possible. I'll investigate non-ipod solutions then.