An internal card gets more interference than an external USB DAC solution.
An internal card, from my experience, is not a worthwhile upgrade.
You probably wont believe it, but a PCI (not sure of PCIE/USB) soundcard adds to audio latency.
If u r referring to ext. sound cards like Xonar U3, SQ s very poor, even compared to onboard sound like ALC1200.
There are many great soundcards and many great external units. The answer would depend on what you need for features, output options and your budget.
If you're using a computer and want to use an external DAC, you still need some way to transport the digital signal to the DAC for it to work. This is accomplished by a soundcard's digital output (many integrated motherboard soundcards have these as well, albeit of lower quality). In this case, the soundcard is acting as a transport and relegating all the D/A conversion to the external DAC by providing it the digital signal.
Some external DACs also run off USB, which eliminates the need for a soundcard to act as a transport. Basically, this would simply require you to connect a USB cable from your computer to the DAC.
This is the simplest option but also, usually, the lowest quality one.
plain USB DACs are very prone to jitter
The bottomline is a DAC only converts digital signal but without a good sound card, the digital input will be bad and therefore cannot produce a significant increase in SQ...
I hope this gives a clear picture...