Best Inexpensive DAC

In the last 12 months I have mananged to purchase a used ML27.5, used ML38S and a new pair of Thiel 2.4. I am broke, but I can't stand listening to my old Denon CD player form 1992. I do have a coax digital out on the unit, so I thought of purchasing an interim inexpensive DAC to get me by until I can get something a little better. Any suggestions?
I'm not quite sure how you define "inexpensive", but I'll toss out a suggestion for what it's worth.

I'm a Birdland dealer, and the now-discontinued Odeon Lite is a very nice little DAC with a volume control. I sold many pairs of $16,000 ballpark Sound Lab electrostats using the $970 list Odeon Lite as my DAC. There are a couple of used units for sale here in the $500 ballpark, which is quite reasonable.
Another approach is to check for his pared down, purist approach DAC's listed new from $250 to $500 range.
In this very modest cost approach to top quality, there is even option of tube output DAC.
I believe that a Timbre TT-1 or Adcom 700 DAC {believe that is the model #},would make improvements.Can't comment on the Birdland,but it is warrantied.You might read the TAS review of the Birdland to get an idea.
The Bel Canto DAC 1.1 can normally be had around $500 and the DAC 2 for a bit over $800. Also, the Perpetual Technologies P-3A is fairly good with a few modifiations for less than $500.

Check out the Channel Islands DAC with the upgraded power supply. I was looking for an inexpensive DAC for my family room system to improve the sound of an older Toshiba DVD player (SD-9000). It is used mainly by my daughters so the Toshiba sees more Muppet Movie and Power Puff Girls DVDs than music playback but I still wanted something decent without spending much money. A member listed a set of the little Channel Islands boxes with an upgraded hard-wired power cable connecting the two for $350 so I decided to give them a try. When they arrived, I hooked them up and looked around for a disc to try and settled on "The Nightmare Before Christmas" (great soundtrack, Danny Elfman is a genius!) just to see if my $350 was well spent. I ended up sitting through the entire movie and then ran upstairs to grab some CDs. The system, although very modest, sounded pretty amazing - Jolida integrated, Athena AS-F2 speakers, Toshiba transport and the Channel Islands pieces wired with DH Labs cables - for a total $1100 investment. Your equipment is of a much higher caliber than my family room system and you could definitely do better for more $ but for around $350 (used) I haven't heard anything that's better.
My vote in the used 300-500 price range would be for any of the monarchy m22* dacs. Very nice and big improvement over the internal dacs of my pioneer dv45a using an m22c.
Assuming "inexpensive" means approx $500, a used Bel Canto 1.1 or a MSB (with 24/96 upsampler card installed) could be worth investigating. I use a Bel Canto 1.1 and am quite satisfied at the price:performance ratio
How about MSB and Musical Fidelity Dac?
I have a Benchmark DAC-1 & like it alot. It beats out my Phillips 963SA for sound quality & can be used as passive digital pre-amp with your amp because it has a vollume control. Plus it has a decent headphone amp, for the price I find it hard to beat. We tested it against my friends modded Art Dio & preferred the Benchmark. His DAC wasn't broken in yet & we will resume testing again today since his Dio has had plenty of break in time.
One more low-price jobbie; Theta's 'pro-basic'2--around 250.
A used Birdland Odeon-lite should be around $500 and mods for it can be had for around $700. World-class performance for $1200.
I'd have to second the Channel Island Dac. Just saw one without the upgraded PSU go for 220. I've owned several dacs, MSB, Theta, Cal Alpha and the Channel Island was the best. There was one with upgraded PSU for about 400 recently also. This is a very good dac for the money.
I was using a Denon DCD1650AR CD player, when I also decided to run the digital coax output to an external DAC. (I'm using a BAT VK-20, Aragon 8008BB and Thiel 3.6's.) I chose a used Dodson Audio DA217MkIID, which is probably more than your budget allows, but the point I am making here is that the sound was totally transformed. The Denon makes an excellent transport, with solid, reliable and error-free operation with any CD I load into it. You may find that it might be worthwhile to get a better quality DAC, because you might be willing to live with your Denon longer than you think. For what it's worth ....

Good luck!
I think the Perpetual Tech P-3A is an okay piece. I own one and it suits my needs. I recommend the Monolithic power supply, for protection purposes. With the supply, it will be under $500 used. My only complaint is that it is not in the form of a component. It looks more like an ethernet router than a stereo component.
Your approach makes sense, but beware possible shortcomings of the digital out from an old cdp. I did the same thing and used, initially, the digital out from a 1992 top-of-the line Harman Kardon, the HK 7600 11, which was Class D S'hile and cost $600 new back then. I thought it was ok until I tried the digital out from my new inexpensive sacd/dvd/cdp (Sony DVP NS-500V. UNBELIEVABLE IMPROVEMENT. You might try another transport for comparison, eg. a cdp from a friend, just to double check that the Denon is doing its job.
CAL Alpha, 24/96 if you can find one.

Nuff said.
The fact that Cal Audio is out of business, you can get a great deal on an Alpha DAC. There are two versions, the newer is the 24/96 version. Both are excellent with some saying the original version is better. I owned one. This DAC will get tubes into you system and just makes digital sound right. I've seen them here on Audiogon for around $500-$600 bucks. Good Luck with your search.
Great Northern Sound repairs and mods the CAL Alpha.
Right-on Stereomaniac, Cal Alpha, Steve's da man.
Here's another vote for Cal Alpha. If you're really broke
look for a Cal Sigma.

Both units respond well to upgraded parts, PCs and tubes. Their not pretty to look at, but the build quality is excellent.
I had a CAL Alpha and after I got over the liquid highs and great soundstage I began to realize that it just isn't very dynamic or involving. I'm currently a fan of Meridian DACs--a used 563 is now a budget piece and also lets you switch between four digital inputs. Much more involving than the CAL. I heard a heavily modded Perp Tech and I thought it was bloodless. You can go nuts trying to find a budget DAC which has it all but I concur with the Bel Canto and benchmark recommendations at a slightly higher price point. I'm intrigued by the raves the Scott Nixon pieces have garnered.
Aragon D2A MkII with seperate IPS power supply. It's old but it's a fantastic sounding unit.

I got the Electro Visionary Systems Millennium DAC by Ric Schultz ($300.00). It is an excellent DAC for the price but it does not have the upsampler. Check it out there is one available in Audiogon.
The EVS millenniums will destroy the msb links.