The DIP should help most dvd/cd players going to a DAC.
You might want to get it from AA where you can return it if you don't like it.
As far as DVD vs CD sounding better, it depends. I thought all my DVD players (using coax) sounder better (player-->DAC) than the regular Sony mega box (toslink).
However, with the setup (player--->DIP(s)--->DAC) they all sounded very similar.
The ES mega box (toslink) sounder better than any of the DVD players I tried (Sony, Toshiba, and I forgot the other one).
I know some DAC manufactures (BelCanto, for one) suggest you use a DVD player with Toslink going into the DAC. I can't comment on this from personal experience but user comments on this idea suggest that coax to DAC is better.
Also, the DVD w/o a DIP may sound better because DVD's have an output buffer (16k, I think, please correct me), that's supposed to reduce jitter. Once the DIP is in place, it should take care of most of the jitter issues. So, that would explain why the DVD players and the regular Sony sounded similar with the DIP in use.
KP