New DAC or New CD Player

I have a Micromega Stage 2 CD Player. I was thinking of using it as a transport and spending around $1,200 for a good DAC. Is that a good way to go or does it make sense to buy a new all in one player? I guess what I'm asking is how much of an improvement can I expect over my current Micromega 2 by adding a good DAC. This would be my first try with seperates and I'd like some feedback on what to expect. Also can anyone suggest what products in the $1,200 range might work best with my Micromega as a transport. Thanks, Rob