Do I need a DAC?

No, but you may prefer one over the other so try both.   I have my disc player hooked up to my pre and DAC.   One analog and the other coax digital 

Yes you absolutely do need an external DAC to "improve" sound. At what price point, ain't no telling. 

Without you going through it.

Try what you currently own. If it sounds good to you,you have arrived. If you feel there is something missing,then try something else.  Build your system to fit your tastes and desires. This is a hobby,not a contest. Enjoy the music first and foremost. 

Either, you purchase a good CDP ( good on board DAC), or a transport plus a separate DAC. You will be better served by the separate DAC, and a separate preamp. I would stay away from all-in-one components. If your concerned about the the expense of separates, get a good disk player like a Luxman, Rega Saturn, etc.

Well chosen components improve sound quality with cost. There is virtually no limit… think $50K per component or more. Ideally you get the best possible source: streamer (or old school transport)  - DAC, preamp, amp, speakers. This gives you the best possible sound. I started out at ~ $ 500 / component… I am now at $20K / component… each upgrade has been phenomenal and brought great joy to my life. 
 

So, yes, can you benefit from a better DAC, absolutely. A great streamer will give you as good of sound as your transport… and infinite access to music, better preamp and amp will improve all.