Pre-Amp vs Processor

I have a Rotel 1066 surround sound processor with digital inputs and really enjoy the sound. It is my first and only hi-fi set. I am considering getting a 2 channel set up for another room. But I noticed the rotel pre-amps look like they only have phono plug inputs. Isn't it better to have the pre- do the decoding? Thanks in advance.
Not necessarily. It is quite possible that the player will have superior DACs than the pre-amp. If you purchase a two channel pre that only has analogue inputs just be sure to use good quality interconnects from your disc player. If you happen to find a two channel pre that has a built in DAC then you will be able to try both hook up schemes to determine which component has better DACs.
What player are you considering? I definitely agree with Rcrerar above.....
A preamp that has a built-in DAC will have a digital input in addition to analog inputs, and it may look like a phono plug input.