Keeping the signal chain digital for as long as possible, or rather avoiding unnecessary Digital => Analog => Digital => Analog conversions will increase the quality of your signal, sometimes by a large margin. It just depends on how strong or weak the other components of your signal chain are.
But keep in mind that you really need to think of this in relation to the other parts of your build. Crappy SNR cheap-o amplifiers? You probably don't need to fret as much about your signal chain. Starting off with high-level inputs from your stock head-unit? It's probably already screwed, so being cautious from that point forward won't really do a lot for you.
If, on the other hand, you have something like this:
Quality Digital Player => Coax/I2s/Toslink => DSP (digital) => High-end DAC [Sabre ES9038, Dual AKM4499 chips, etc] (digital input / analog output) => Balanced outputs to Amplification
Then yes, an unnecessary Digital to Analog conversion will affect your system. The ability and accuracy of your setup will also matter of course.
Basically, the point I'm making is that being extra, extra mindful of your signal chain becomes important when the rest of your install is good enough to have that part become the weakest link.