Since you’re using analog outputs (RCA) of Naim NDX, you’re using its internal DAC which is in all likeliness superior than the DAC inside C2500. If you would like to switch DAC and bypass the internal DAC of Naim, you need to use a Digital COAX cable with BNC connector on Naim digital output and RCA connector on C2500 digital input.
If I didn’t bypass the processor, would i be hearing two separate DACS at the same time? - No.