New CD player or DAC?

Hey guys. I've posted some similar threads on this topic recently but need some advice. I acquired a Playstation 3 to handle video and blu-ray duties. I currently have a Yamaha DVD S1800 universal player, now $79.00 on Amazon(go figure). I want to concentrate on 2 channel cd reproduction as this is the great majority of my listening, especially with 700+ cd's.Shouls I shop for a new dedicated cd player or use the Yamaha and add an upgraded DAC? I'm not against getting a nice, used piece either. Any advantages of one over the other? I'd like to be at $500.00 or under if possible. Suggestions most welcome.
Beernut