mp3 input to reciever poor sound quality

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Folks,
I have a Sansa Fuze mp3 player hooked into the phono input on my Onkyo TX8555 receiver, and my sound quality is lousy. I dont understand why these newer receivers dont have inputs to accomodate such digital sound sources to give better sound quality. Does anyone out there know how I can improve the sound quality with this set-up? Thanks
 
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