Audio aero capitole mk2 as a DAC

When I bought this player not only I liked the player but also I hoped to save on some gear like preamp, cables, DAC and so on. I love the way it sounds but I got seriously disappointed when I tried to use it as a DAC. The same CD did not sound the same when played on the player itself or being fed as a "wav" file to it from a source like a computer.
I tried different digital cables and even an external sound card - USB to digital converter.
All the beauty of the original sound of Capitole is lost and sound is harsh with flat boring almost like MP3 like sound stage.
Playing hi-res 24bit files gives pretty much the same result.
I wonder if any one has the same experience and resolved it. Best regards and thank you for the advice.
The xplanation is simple: most digital sources./transports connected through a coax or USB cable will have jitter levels one level of magnitude higher than the internal Philips Pro transport.
I hear a flat soundstage with USB sources and lots of sibilance with SPDIF sources, depending on the quality of the external transport / computer.

However, there is one outstanding exception: DVD Audio played on an inexpensive DVD player (U$ 50 Philips) and connected through a high-quality SPDIF cable to the Capitole sounds wonderful, because the Capitole's internal architecture is 24/192 from beginning to end (the same standard as DVD Audio). There is no interpolation, no rounding up nor rounding down. It locks on 24/96 or 24/192 and plays beautifully, with much improved finesse and dynamics.
Try Muddy Waters: Folk Singer, available on DVD Audio.

Based on that experience, I would venture to say that 24/96 or 24/192 HD files will play well, though quality of the digital cable is paramount (no USB please).
Have fun!