Cheap external DAC for DVD player



I have never used an external DAC and would like to hook one up to the digital outputs my Panasonic 47S DVD player.

1) Can I hook the digital out from my DVD player to an external DAC and then in turn to my 2 channel preamp to play CDs?

2) And use the DVD players analogue outputs to the preamp for watching movies. Or would I still use the external DAC for movies?

Does this make sense.
Is there a benefit to do this with a $110 DVD player and will I get good CD playback doing this?

Which cheap DAC to get?
Scott Nixon or others.

...or should I just get the Oppo 970 and be done with it.
128x128mjcmt
I use an old CAL Sigma II DAC for improving DVD sound through a two-channel system when watching movies. Sounds great.
I have a Panasonic 47S, Pioneer 563A, and Technics A-10...all DVD players. The Pioneer and the Panasonic were both around $100 or so when I bought them, the Technics around $400.

I've tried them all as transports in the past...the Pioneer was the clear winner. Yea, I know...how could one cheap DVD player be better than another cheap DVD player?...BTW, the Panasonic came in last as a transport.

Dave
On reccomendation from fellow Audiogoners, I purchased a Paradisea DAC made by MHDT labs. ONly available direct from Taiwan via Ebay for $500

It performs VERY well
The Creek OBH-14 DAC is a good choice for making a cheapo DVD player sound tolerable in my experience. It has a volume control so you can run it directly into an amp, but it also has fixed level outputs for a preamp. Nice sound for the low bucks involved.

If you do wind up with an external DAC, I would definitely use it for movies too. Just set the DVD player's digital output to convert DD and DTS to PCM.