Is it the transport or DAC that enables HDCD/Red?


Good morning all,
I am new to transports and seperate DAC's. I recently purchased a Parasound CBD 2000 Belt Drive Transport and am looking to buy a DAC.

However, I am not sure what signal the transport is to provide in order for me to play HDCD as well as Redbook CD's. Should I expect the transport to provide the HDCD and Redbook signal or does the DAC do all the work?

Does balanced in/outputs produce a better sound than does regular RCA in/outputs?

Right now I am looking for a compact DAC (the smaller the better) that offers good to excellent sound for not a lot of money. I listen to classical (choral/orchestral) and jazz music. I love the human voice and large scale orchestral and choral works.

What shoud I be looking for since this is all a mystery to me at this point. I am just being honest. I really don't know what's happening in this area. By the way, I would be pleased if you would offer some of your choices please.

Finally, I am reading more so that I can learn more. Thanks so much for your understanding and input. Have a great and wonderful day and weekend.
rbwinterlink
Plenty of DACs that decode HDCD, unfortunately they are all a few years old. Besides those mentioned above, Adcom, PS Audio, and Proceed come to mind.
A well mastered HDCD disc played through a quality HDCD player or DAC is superb. One of my favorites is Beck's "Sea Change." Joni Mitchell "Blue" and "Court And Spark" are a couple other great ones.
The reason high-end players/DACs tend not to decode HDCD today is strictly based on cost -- licensing fees.
Yes thanks to Microsoft's purchase of PMD.
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The grateful dead continue to release HDCD recordings and they generally sound reaaly good. Still anachronistic after all these years. I believe they were early supporters of the pacific microsonics technology that they used in the mastering process-- being from berkeley and all