I use my Oppo 203 as a transport, and it is connected to a RME-ADI2 DAC via coax. The ADI-2 then runs balanced to my pre. There is a subtle, but noticeable increase in detail when using the external dac versus the internal in the Oppo. AFAIK, the internal dac in the 205 is better than what's in the 203, so there may not be much improvement with the 205 going to an external DAC.