digital upgrade opinions

hello, I'm a newbie, and recently put together a midfi system with a very decent tube integrated and a pair of monitors.
I'm looking to upgrade my source which is currently a generic DVD player. I'd basically like to hear what would be a more wise upgrade path between:
1) Getting a "budget" CD player like the Musical Hall/Onix MMF25
2) Spending all my money on the best <1000 DAC I can find (DAC recommendations are welcome) to pair with my existing player.
Any advice would be great!