The latest PS Audio DirectStream DAC (FPGA) is worse sounding than the older PerfectWave mk2 DACs (upgraded from the mk1 models). It's not anymore resolving than the PWD2, sounds very lean in bass, and has an upper-mid emphasis. However, the PSADSD is smooth in the high-end, but with the unfortunate side effect of softened attacks (akin to software upsampling in JRiver to the PWD2 at a higher sampling rate, but much more pronounced). In three words: bright, smooth, forgiving.

The Hugo is much worse than the DirectStream. In three words: Lean, grainy, and boring.

Folks ... because of the ever-increasing power of FPGA/DSP, customized and software-based D/A conversion is likely the future...
...check out PS Audio PerfectWave or the top-end Chord DACs (YouTube has some stuff, too).

Lol

The challenge for a DAC, regardless of FPGA or dedicate IC, is still turning bits into accurate voltage levels quickly.  FPGA/DSP may indeed have a future, but I don't think it solves these fundamental issues any better.

Yep.

DSD/Sigma Delta/Class D: What does all these have in common? Use of lossy pulse based coding to represent the original data/waveform/power etc.

Sony likes to invent stupid/useless/expensive/redundant formats: Mini-disc, Memory Stick, UMD, Betamax, and you can add SACD/DSD to the list.

If you think about, making your own DS D-A converter on a programmable chip is a really neato thing; but so far, I haven't heard any greater "awesomeness" from these FPGA solutions compared to existing off-the-shelf specialized D-A chips, 28 miilion taps or DSDx666 not withstanding.

Also, Merv is right. You can do some of this with the FPGA and write your own stuff in an FPGA. The timing of the signals needs to be carefully taken care off though. And one still needs a DAC (though with less bits). It's better to have a dedicated IC that is internally optimized (IMO).

Sounds great in theory, but OTOH, a great opportunity for less capable designers who might not know the scope of what they're doing and therein screwing things up. We're talking about very complex systems inside these ASIC chips made by very knowledgeable teams of engineers at very large and resourceful mega electronic manufacturers. The sound of the DS-DAC and Chord stuff make sense when you look at it from this lens.