Should I buy a seperate dac?

  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. 

My experience with outboard DACs goes back to the mid to late ’90s so I don’t know if it would be applicable to the digital of today, but back then I did find that adding digital separates between my $600 Carver CDP and my preamp improved the presentation.

A few years ago I decided it was time to upgrade my ancient front end, so I bought Marantz SA10 because I wanted to do the SACD experience and I also wanted to get away from separate boxes and the cabling that goes with them.

Make sure it’s the BiFrost 2 and not the original Bifrost. The 2 is hands down much much better than the original!

Save your money.

For a first time DAC, I would recommend one above 2K. Any less, one will always want something better up the line, eventually.