Dac or CDP? Which one would be a better upgrade?

Good question! But sticky because one could argue either way.

Some would say buy a great ($$$) DAC and use the DVD as a CD transport for now (plus you'd get good movie sound!) And maybe get a great CD transport later for 2-channel Redbook regardless whether or not you change the DVD player.

But after some thought, I'd say get a great ($$$) CDP and be done with ever having to upgrade that item -- a Levinson 390S for instance, or one of the Wadias, will also have digital inputs so you can run your DVD audio through the CDP's great on-board DAC for good movie sound that way.
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I want to clarify that I am about 90% music 10% movies. Thanks!

OK, then all the more reason to invest in the best (used of course) CDP you can scrape up the money to buy, and then improve/upgrade the system around it as time goes by.

A used ML 390S will cost between $3-4K Quite a few right now on the Gon.

A used Wadia 861 is around the same. 850 is less but doesn't have any digital input.

And there are others in this category, but the fundamental thing is to buy the best you possibly can for your favorite source material, both for your enjoyment and as a reference benchmark for hearing the benefits or other changes/upgrades.
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