Is the 3.5mm audio output on the latest Mac mini also an optical output?

No. None on the newer Mac’s with a single audio port have optical digital output. What you need is a USB audio adapter or DAC that supports optical digital output.

Not sure if this fits in with your current Mac line up, but in addition to a new Mac Mini. I have 2 sooped up 2012 Mac Mini’s with SSDs and 16GB of RAM. My wife uses one and I turned mine into a media server.

Does your DAC have USB input? That is actually a better way to go than optical input.