Should I buy a seperate dac?

I have a Denon from the early to mid 90s.  I added a cheap Topping E30 to about 3 years ago, and was surprised at how much better I like the DAC.  There are better ones too.  

I would test if out with Dacs that you have a trial period with and decide if it is worth it. 

It’s a good bet the Bitfrost would provide a meaningful improvement, but don’t skimp on the digital interconnect as that can be a significant bottleneck to performance if you go cheap. Another DAC to consider would be the new Denafrips Ares 15th although it’s about $300 more expensive.  Best of luck. 

  I looked at your system and as a kid I started with an SCA 35 and an FM 3, Garrard 40, JBL L-19’s. With my paper route income, I moved up to MK III’s and built my own pre. I so relate to where you are , it’s all about the journey. That being said, and as the owner of an early Uber Bifrost, and a Yiggy with the latest USB, I think it would be an improvement. If I my play the Devils advocate, does your CD have a USB output? It appears not and if I’m not mistaken will limit you to the clock in the NAD. Someone please correct me if I’m wrong. That being said if you want separates which I encourage, get one of the DAC’s mentioned above as they either are nice. You will absolutely need a better quality digital coax to appreciate the difference. Being frugal you could get a DAC and a cable (Audioquest on Amazon) with a return policy. If you have an upgrade power cord try that too, but don’t buy one for the initial test. The other thing to consider if getting the DAC is streaming, either a subscription or free radio ( streamer or laptop required ). Dot1FM and Paradise are both free and have good SQ. If you do this, you’ll probably wind up getting a better transport to replace the NAD. You could sell the NAD and purchase a used transport. I was fortunate enough a few years back to be gifted a Musical Fidelity transport. I sent it in and had it serviced, it was inexpensive and works great. Even on a budget as you’ve demonstrated, you can get great results and have a ton of fun and be proud of your accomplishment. As you can see it never stops. 😆Cheers , Mike B. 

It depends on the rest of your system. I didn't see a virtual system under your user ID. 

Your CD player has Optical and coax out. Typically, if you had USB out you would try both and see if one sounded better. 

Schiit is a good bet in this range of the market. Higher up is almost always better... but what the rest of your system is could be limiting... or not.