DAC or new player ?

What is your present player?

sony cd/sacd single disc NS 500

In this situation, my choice would depend on whether I eventually wanted to go for a computer-based source or not. If not, I would save for a better Redbook player, the Cambridge for example. If I did want a computer as my transport and music library, I would get an external DAC with USB or Firewire, and use it with the Sony and S/PDIF for now.

I've heard the Cambridge 840 and preferred my present transport/DAC's sound although the 840 was impressive. However a good dedicated transport is hard to find for little money.

Here's a suggestion... the CA 840c can operate as either a DAC or CDP. Get one on 30 day eval and compare standalone versus as a DAC to your Sony. Of course, the DAC won't help the SACD output of your Sony so you need to decide how important SACD is to you.