Do I really need a Dac?

Here is a 6 year old post from Audio Asylum that addresses your question:

"I use the single disc X555 as my reference player and the 5 disc 801 for just random playing around. The internal DAC's on both are fairly decent, but I use them through a SDP-9ES external DAC. the DAC in the SDP-9 is over 10 years newer and has much more detail than the aging internal ones.
Both have excellent CD tracking that will put most others to shame."

I think that DACs and cd players have improved substantially in the last 20 years and that you should be able to find something that makes a worthwhile upgrade in the changer.

NO you don't need a DAC. In my audio club almost no one had one and they were not missed.

A good DAC would probably beat your CDP, but you also need a good 1.5m S/PDIF cable from Transport to DAC. And BTW, your transport will need to be replaced or improved. The jitter on older transports is really high. I have modded quite a few of them over the last 12 years.

You are looking at probably $1500 for the DAC (Wired for Sound DAC2), $4000.00 for a good transport or instead your old transport and a $600 reclocker and finally $500+ for a good 1.5m S/PDIF coax cable. You can do it for about $2700.00

This will transform your system. The source, particularly the digital source is the most important thing next to your speakers.

Steve N.
Empirical Audio