If I were you I'd skip the external DAC (and extra cabling) and have the Denon modded, but that's me.
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Universal players often have the problem of playing SACD extremely well and redbook CD very poorly. You may improve it by modding it, but if your collection is mostly CD, then an outboard DAC may make sense, such as a modded MSB or modded Perpetual Technologies P-3A. These are truly superb DAC's and modding the 2900 will probably not equal them. However, if you do this, I would strongly urge you to get digital mods to the transport and maybe even a superclock2. This will make the difference between sound and music.
I second the notion that your best bang for the buck would be to skip the external DAC and have the 2900 modded. Dan Wright (ModWright) can really work some magic with the 2900, and one of his options includes a tubed analog output stage for 2CH. I have a 5900 in his shop right now receiving (among other things) his tubed output stage mod. From what I have read, the stock 2900 is a bit of a disappointment, but with some mods (which Exemplar and Underwood also do a commendable job of), it can improve dramatically.
I have a Denon 2900 that I use with a Camelot Aurthur DAC for 2ch. It sounds fantastic.
That being said, it may be more cost effective to have the 2900 modified. I've actually been considering either getting my 2900 modified or selling it and upgrading to something else. While I'm thrilled with the 2ch performance using my external DAC, I'm less than thrilled with the performace for SACD and DVD-A.