Outboard DAC for DVD and CD

I've been 'out of audio' for about seven years doing 'family stuff'. I'm trying to catch up with digital technology. Is there DAC's out there that I could hook my DVD player's audio outs to that would also convert regular CD signal? I would like to keep it under $2000. If not, if you had $1K-$2k to spend on an outboard DAC are you better to spend that on the latest generation new or a used Levinson or Wadia? Thanks for your help.
I have a Pioneer DVD player and just bought a Audio Note DAC 1.1x. The cost is under $2K it is 1x oversampling (same digital portion as the DAC5 (over $30K)) and it will receive 24/96. It down samples the 24 bit to 18 because it has a Analog Devices 18 bit DAC chip. It has a SRPP output with dual 6922 tubes and the sound is fantastic. I bought mine directly from Audio Note England for $750.00 shipped. I believe this is the best going IMHO. The DAC 1.1 kit would be very good as well. It has a smaller power supply and a different output board than the DAC 1.1x.
I've just arranged to have ordered a Camelot Technologies Arthur 24/96 upsampling DAC to be used in series with their Dragon 5.1 anti-jitter device. (sources: digital outs from Pioneer DV-05 DVD player and Pioneer Elite PDF59 CD changer) I'll post the results of the combination hereabouts, but if the upsampling DAC is of similar performance quality as the Dragon jitter filter, it should be a very impressive combination. Also, not incidentally, the retail for each device is in the 500-700 dollar range. Happy listening and good luck with search. By the way, I'm not associated with Camelot except as a customer, just impressed with their products and customer support.
I would recommend checking out EVS (www.tweakaudio.com). People raved about the Millenium DAC 1. The Millenium DAC 2 was originally supposed to ship in September...then it was delayed...and delayed...and delayed. As far as I know, they still haven't shipped. They supposedly cost $1050. Another less expensive option might be to buy the $350-ish MSB Linc DAC3 and pay $200-$300 more to have Stan Warren modify it for you. That might be faster.
My experience in playing normal CD via Pioneer DV-434 DVD player and Perpetual Technologies P-3A has been very good. There's definitely a big difference between playing the Pioneer alone vs. with P-3A DAC. In addition, I dug out my old Audio Alchemy DTI Pro 32 to de-jitter and to add resolution enhancement in their 24 bit mode before feeding P-3A. The addition took the system to an another level. The system sings like the latest megabuck digital frontend. Thus, I have ordered the P-1A to replace DTI Pro 32. Send me an email if you are interested in my findings.
Do these dacs or others work on 5.1 dts or dolby digital as well as cd/
I'm not aware of any external DACS for DVD. It would have to be 6 channels so maybe 3 stereo DACS would work. If there is such a creature you would also need to buy a processor for the Stereo, DPL, DD, and DTS conversion. This seems too expensive to me for what you'll get.
You have two other choices:
1. Buy a highend DVD player and use it's DACS,
2. Buy a high-end preamp/processor.

I recently bought a Sony S9000ES CD/DVD/SACD player. It greatly improved the sound of my CDs and DVDs. It was like listening to them for the first time.
Tmartinjr,I already have both a reference b&k and the sony 9000es player.The sacd playback of this player had me wondering if there was anything available for a sound quality close to sacd for dts and dd.I guess not,but i do have an acoustic zen digital mc=zen cable coming in the mail,and after reading the reveiws i think this will be a major plus for theater sound compared to the aq topaz and the dh labs that i now have.I agree 100% about the quality sound of the 9000 on all formats.
Someone could use CD encoding for audio and it would be better than DD or DTS. For example, the Stereo tracks on Fleetwood Mac's The Dance, and James Taylor's Beacon Theater, are clearly better than the 5.1 tracks. I bet the stereo tracks used very little, if any, compression. With the Fleetwood Mac, DVD, the manufacturer needed to place the stereo and DD tracks on opposite sides of the disc. They ran out of space.
With CD and SACD, there is no compression of signal. DVD-Audio uses Lossless compression (about 2 to 1) that expands back to the original (much like a computer ZIP file)so it can be as good as the original.
DTS uses compression and makes guesses concerning the orginal signal. In my opinion, it can't be better than CD quality.
Dolby Digital uses about twice the compression as DTS and therefore has an even lessor quality sound.
MP3 uses even more compression--even lessor quality.

Dolby Digital and DVD-audio have options. They can have greater compression on the back speakers than the front to save disc space. I bought Aaron Nevelle's Devotion DVD-Audio to test several DVD-Audio players. Someone on a forum said that it was the best recorded DVD-Audio disc. Now, since I only have a SACD player, I can only listen to the DD track. Devotion does some strange things (like drums and lead singer in the front and cymbals and backup singers in the back. The sound from the back is very grainy. I bet it has a lot of compression for the rear speakers.
Tjmartin jr,pick up a copy of home theater march issue.I think you will find it interesting.This meridian lossless packing is basically chopping bits of to make material fit.There will never be 192khz five channel recodings and even 24/96 will never be a two channel/five channel option,at least not in it's pure form and from everthing iv'e heard eagles hell freezes over dts ect, i prefer 2 channel.but like you mentioned the rears in movie material are distorted and instead of trying to revolutionize audio into more channels 6.1,7.1 ect it would be nice if the industry put there resources into improving dd,dts sound for movie playback instead of music playback.I do not beleive they will ever get 5.1 music right,as a matter a fact i do not beleive 5.1 can be made to sound right.As far as movies i prefer surround sound,just need more bits to liven and smooth out the sound and after listening to sacd this has become more evident.
I use a Bel Canto DAC1 with a Pioneer DV 525 as a transport with great pleasure. There are others like MSB, Perpetual Tech, etc... that can be used as well. Here are some links to some reviews that might give you some ideas, or at least things to ponder. These all concern the DAC1. Good luck, Charlie

http://www.onhifi.com/product.shtml http://www.soundstage.com/revequip/belcanto_dac1.htm http://www.soundstage.com/revequip/belcanto_dac1_followup.htm