Found this in a lengthy forum but looks like it had the best solution.
I have had the same questions that you describe and have made it work in the following way:
Streming from Plex Media Server > Moto G4 > USB Audio Player Pro (10$ android app from Play Store) > USB OTG cable > Audioquest Dragonfly Red DAC > B&W P7 headphones
Before buying the DAC I used the app USB Host Checker to ascertain that the Moto G4 has limited support to act as a USB audio host. The Moto G4 will deliver audio thorugh the DAC when you insert it using a USB OTG connector cable – however, the audio sounds no different from what you get out of the normal headphone jack. In the instructions Audioquest supplied with the DAC it was recommended to get the USB Audio Player Pro app, as this has a built in USB device driver. And what a difference! Now the DAC gets to work and every aspect of the sound has improved. Georgeous details, lush bass, lovely separation in the high frequencies and the mids of the human voice and acoustic instruments really shine.