DAC vs CDP DAC vs Processor DACs?


I know the source plays a huge role in how the (Perhaps a parasound D3) would have over say a Halo C1/C2 processor for 2Ch audio? How about external DAC's?

I know even low end receivers these days are coming with 192 kHz/24-Bit DAC's, my current 5760 by yamaha has them. What makes a higher end DAC that much better? I assume all of them interpolate the digital signal and manipulate the analog output according to the interpolated data in a similar fashion.
mstang1988

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Do you know if the external DAC's will allow digital passthrough for sources that can do more then 2ch? How many of then can decode DTS/Dolby Digtal etc?