Upgrade my CD player or buy a DAC?

I cannot decide wether I would be better off buying a dedicated CD player or a DAC and use my current player as a Transport. I am currently using a Yamaha BD-S2900 as my CD/DVD player. I use my system almost exclusively for 2-channel audio, mostly Folk, Rock, and Jazz. My current setup:

Vandersteen 2CE Sigs
McCormack RLD-1 Preamp
Sunfire 5x200 running Biamp
Yamaha BDS-2900
Apple G5 for digital music
Audioquest King Cobra Interconnects
Audioquest Type-8 Speaker Wire

I have a budget of up to $600, let me know if you have any advice.