Do you need a dvd player for video?
If yes, I would suggest adding an outboard jitter reduction device, preferably one that can upsample and an outboard dac.
There seem to be many good buys on used dacs so you should be able to find one that won't break your budget.
Some possiblities would be a Cal Audio Sigma or a Micromega dacs. Another possibility for little money ($123+shipping) would be the Art DI/O dac. My limited experience with this dac is that it works better with an upsampler jitter reducer in front of it, but when properly interfaced it is a great bargain. It only has a coaxial digital input, requires some tweaking and accessories to get it set up properly and some burn in time to sound good, but I think it might have potential. It has both a/d conversion and d/a conversion so you could run the analog output from your dvd into it, convert to digital and then convert back to analog at 24/96, plus in the a/d conversion mode you have the option of adding tube warmth (it has a tube in its a/d circuit). All this for $123 plus shipping. It can be modified for around $200 into something that sounds much better. Search the forums here and at audio asylum and harmonic discord for more info on the DI/O. Only negatives I have found with the DI/O are some rfi problems which I have been able to get around with changing digital cables and shorting plugs and its imaging is a bit vague.