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
Ghostrider - I read this before but have hard time to understand importance of it and also why wouldn't this be applied to regular redbook CD in downmixing. This is more of preprocessing technique and has nothing to do with HDCD. If I learn that, for instance, TELARC is using similar technique to downmix their redbook CDs I wouldn't called TELARC CD a different standard. TELARC currently uses DSD recording format/technique - does it change CD standard?.

I'm also not certain how much it affects the sound. There is probably very little energy above 20kHz and it is already filtered out in downmix processing. Whatever left above 20.5kHz is folded into passband starting from 0Hz but people who own NOS players don't complain. They even claim better sound.

So - now they claim that what differentiate them from just simple downmixing process is that they hide somehow information about status of adaptive filter at given moment in the music itself. Hiding it in the lowest bits while it's used only 2% of the time maximum (as they claim) is strange. Maybe I'm slow to understand it, but if they used adaptive filter in downmixing why do they need to match it in playback? They stated before that when high frequency info was present (like cymbals) they applied sharp antialias filter and when it wasn't present they bypassed filter. All this was done to avoid using sharp antialias filter in the player. Fine, but now there is no high frequency above 20.5kHz in the mix and even phase is the same for all signals - I don't understand what they are matching (and how)? Oversampling and Bessel filtering in my DAC sounds simpler to me.

Error correction code (Reed-Solomon) is pretty weak and the player bypasses the data with the wrong checksum. That would mean that adaptive filter info hidden in the lowest bits (as a pattern or a sequence) can be lost (fingerprints or scratches). It cannot be that important.

Again - I don't question that it sounds great. I'm just trying to understand. Perhaps the fact that it is not very popular has nothing to do with technical merits (SACD was killed by greed in my opinion).
While we're letting it ALL hang out ;-) I thought I'd mention the JVC XRCD. USA operations now being handled by Elusive Disc:
http://www.elusivedisc.com/products.asp?dept=859
I have purchased a number of these (at CES's) and found the reproduction to be really amazing - especially the remasters of some great older recordings, like the Reiner/Bartok 'Concerto for Orchestra'. They can be played on any Redbook playback system.

I'm not as versed in digital audio technology as you folks, but I am able to understand the process in concept, and it does seem unique.
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My Friends,
Thanks for you gracious comments and advice. I am most appreciative. As you can see, most of this is new to me. I had no idea what a DAC was until I was forced to start doing research after the purchase of the Parasound 2000 transport.

My basic knowledge told me that a belt drive transport should provide sound similar to a turntable with this same feature. Of course I was then forced to look at how to get the sound from the transport to the pre-amp, power amp and then speakers. It was then that the term DAC came up.

Since my last post I've purchased the "Lite Audio DAC-AM Modified" by Pacific Valve Company. This looks like it will work OK for me, however, I undertand there are better on the market but I am just getting my feet wet. Also, I understand this DAC can be further upgraded. Initially I was thinking about the purchase of a used DAC but I thought I would have to have that modded in order to bring it up to todays tech standards.

Is anyone here familiar with the Lite Audio DAC-AM? And can you give me some info on it? Will it reproduce 2 channel (stereo) music OK? I am not interested in TV, movies, etc. My primary listening will be to vocal and instrumental jazz, small and large scale classical works with a focus on choral music. Thanks for all assistance and your response.
1. "...The DAC do all the work".
2. "balanced in/outputs produce a better sound than does regular RCA in/outputs" all else being equal.
3. "compact DAC "the smaller the better" that offers good to excellent sound for not a lot of money": some of the Audio Alchemy DACS are small and though old and no longer come with customer service, offer good Red Book/HDCD sound, and can be found used here on Audiogon for not a lot of money.
4. "what should I be looking for...." Gee, I wouldn't know where to begin, but this is a good place to start.