The right DAC will make a world of difference, however it would be a good idea to mod the transport to make it a good one or you will not get the real performance from the DAC. Most DVD players make excellent transports, but only when they have the digital output section modded. The impedance is usually screwed-up as well as slow risetime on the S/PDIF signal for stock players. The result is high jitter.
As for DAC's, you should lite on a Perpetual Tech P-3A or a MSB gold or Platinum. Both get a LOT better with mods. Once modded these DAC's rival and actually beat most SACD players when comparing redbook to SACD.
As for DAC's, you should lite on a Perpetual Tech P-3A or a MSB gold or Platinum. Both get a LOT better with mods. Once modded these DAC's rival and actually beat most SACD players when comparing redbook to SACD.