I have a PS Audio Digital link III DAC using both a Macbook HD and a cheap sony dvd player as transports. The Macbook blows away the cheap sony dvd as a transport. In truth, using the cheap dvd player as a transport with the Digital link DAC isn't really much better than connecting the DVD player directly without the DAC. Adding the DAC seems to only make it louder given the same volume (but not better). On the other hand, using my macbook HD and Itunes and the PS Audio DAC is fantastic. In fact it somewhat reminds me of my vinyl rig as it adds layers of realism to the music. What gives? I thought a transport wasn't that important (all things considered) compared to the DAC.
You thought wrong. The Transport, ala the master clock is the MOST important aspect of the digital playback chain, more important than the DAC. This is why a good USB interface/converter makes all the difference in the sound of the DAC.