Actually I have tried the built-in DAC of the Parasound P5 by connecting the digital output (coax) of the NAD C516BEE cd player to it. I found the P5 DAC to be slightly better sounding than the NAD DAC.
I think the P5 DAC is decent, but it is a DAC built into a good $1000 preamp. How much of that $1000 do you think is dedicated to the DAC. Since the sound of the preamp, and the quality in general, is pretty good, it's hard too believe that Parasound would expend much of their parts dollars to the DAC. I may be wrong, but that's my feeling.
I love the preamp, but that's why I thought I might be able to improve my system, without spending a lot of money, with a better DAC.
At this point though, I will probably wait until Elac/Andrew Jones introduces their new 3-way Uni-Fi speakers. They use an aluminum 5" woofer with a concentric mid/tweeter. Anyone hearing them at CES, liked or raved about them. The bookshelf will sell for $500/pair. I'm hoping that the weaknesses of the Elac B5 (high end roll-off and resolution of individual instruments) will be overcome by the UB5.