Well the stylus reads the information in the groove, and the the DAC is supposed to read the digital 1 and 0. How well an instrument does these tasks makes me think that's why they're so important in the chain.
I was watching Mike the OCD hifi guy and he ways adamant about the DAC being the thing you build your system around. If you're intro digital I would probably agree. I really don't get why a lot of people are still touting the myth that speakers should be the the most important component thus the one that requires the biggest budget.