The bard song bonus applies 3 damage bonuses. SDI, DI, and Damage Modifier(Applies ALL damage being dealt by player. ie Spells, Hits, Poison Rounds, Strangle Rounds, Blood oath, Reflect Physical, Pet Attack, Pet Spells, Bleed etc)
In PvP SDI bonus caps out at 15 or 30 for focused mage
DI caps out at 100 and shares that cap with items
Damage Modifier caps at 300. (PvP or PvM)
So the SDI will cap out, but the bonus modifier won't. Even at Max SDI, if you have a bard buff you with inspire you'll get more damage out of it. (That goes for dexers too. As long as they are under the 300 modifier total. And it does apply in PvP as well)
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And if you really want the most bang for your buck Running Invigorate along with your inspire if you are not already at the stat caps (150 for each stat) will also give you small boost to spell damage or swing damage.