To dac or not to dac

I use a DAC and love it. A DAC on a basic level is just the guts of a CD player, without the mechanism to spin and read the disc. Better guts, better sound. There is also some benefit in separating / isolating the two parts of the equation (CD reader and DAC).

The DAC does not make your CD player sound better. You are listening to the DAC itself. Your universal player just provides the signal, much like a DVD player feeds the Dolby Digital signal to a Home Theater Receiver, which actually produces the sound.

The player can still have an impact on the sound, depending on how well it reads the information on the disc. Generally the DAC has a lot more of an impact on the sound than the player (called a transport).

This won't be important to everyone but another advantage of an external DAC is that most have multiple inputs, giving you the ability to add its benefits to other sources, like a hard-drive based music server or satellite radio feed.

Yes, experiment with a good quality DAC. Search on DAC threads for recommendations for your price range. For something very different, try a tube DAC. A very economical tube DAC is a used Cal Audio Lab Sigma I or II which can be had for $200-350 depending on the model, tubes, and if it has the upsample board (II Model). If you don't like it, you'll have no problems selling it. I began with a Sigma I paired with my Sony DVD 9000ES DVD/SACD player and it made a significant sonic change for my redbook CD. (On some CD, it's better than my $7K analoge section-TT, cartridge, phono-preamp, speed controller.) I upgraded to the Sigam II which gave me an additional 5-8% improvement. Both are good and I've kept them both in two different systems. Going this route could be cheaper than replacing your DVD player. If your DVD player has a second digital output (Coaxial and fiber optic), one can go into the A/V processor and the other into the DAC with its analog output back into another input (CD, AUX, etc..) on your A/V processor. Good luck and always remember to enjoy the music.