A DAC is essentially a D/A converter, so yes of course you'll need a digital audio signal for it to work.
Almost all of your questions are answered in the documentation, including shopping lists for your project with virtually everything but the kitchen sink in it.

This is the current version: http://www.twistedpearau...gration_Guide_V2.1.3.pdf
See pages 77 or 78, depending on your preference for either a single board stereo DAC or a dual mono stereo DAC.

Unless you clearly state what information you are looking for it's difficult to help you. The pages referred to offer a high level overview of what you need to purchase. If you don't understand them please ask a specific question.

Caps? Included. Don't deviate from the included items unless there is a really good reason to do so.
PSUs? In the shopping list.
RCA connectors? In the extended BOM (page 80). You can't go wrong with WBT nextgen. It's expensive, but it's also very high quality.

Hi Pete. The integration guide is a good thing to read over, even if it seems overwhelming.

A good place to start is first determine the inputs needed. PS wise you have two choices, linear or shunting. One for the DAC and one for the output board. The shunting supplies run very warm to hot so the chassis needs good ventilation. There are adjustments for voltage and current requiring a volt meter. The linear supplies run cooler and you just adjust voltage. Some feel the shunting supplies get you the best sound quality.

Output boards, two choices. Legato or IVY III. The guide covers the qualities of the two.

Many use the Neutrik D panel mounts for inputs/outputs. They come in all assortments, BNC, RCA, XLR balanced, etc.

You get good quality parts with the kits to start with.

Maybe look at some of the completed builds to get an idea of what you have to do and might want?