DTS "D.igital T.heatre S.ound" This is the highest quality audio encoding you can get on a DVD(up to 6.1 discrete channels). Digital Transport - This is like a CD or DVD player with a digital output only. From the digital output of the transport you would run the signal into a DAC- D.igital A.nalog C.onverter. However most basic cd players will have the DAC built in allowing for an analog output signal.SACD is a type of encoding for CD's kind of like DTS except for stereo music. In a high end system it may look like this.
CD TRANSPORT(SACD COMPATABLE) - D/A CONVERTER (DAC) - PREAMP (Don't ask) - AMP - SPEAKERS - With component cables inbetween the components and speaker cables from the amp to the speakers. Note that you will use a single digital cable between the transport and the dac then two analog cables (STEREO) through the rest of the system.
CD TRANSPORT(SACD COMPATABLE) - D/A CONVERTER (DAC) - PREAMP (Don't ask) - AMP - SPEAKERS - With component cables inbetween the components and speaker cables from the amp to the speakers. Note that you will use a single digital cable between the transport and the dac then two analog cables (STEREO) through the rest of the system.