Hello,
Why do you use two esps for this project? can it not be done with just one?
I already answered this question (and provided an external link) in the project description above.
Also the DAC, is that just for output?
In this setup, yes. Audio input is via Bluetooth A2DP. If you wish to use Line-in instead, you could check this link out for a discussion on using line-in with ESP (and an external DAC).
Might I also impose on you to visit this page which presents a generalized extension of the architecture used here – and includes something similar to your drawing.
Hope this helps!
gbd