Question on how DAC’s work...

Hello all!

In my system, my digital sources are a Denon DVD-2900 disc player (CD/DVD-Audio/SACD) & a Bluesound Vault 2. Most of my listening these days is done with the Vault 2 streaming Tidal, especially the growing catalog of MQA offerings. 

My first question is, if I were to start using an external DAC, and that DAC does not have MQA compatibility, would I still be getting the potential of “better sound” from the external DAC even though the Vault is doing all the unfolding?

My second question is if my disc player exports SACD at a different bit-rate than what the DAC is capable of, will the DAC upscale or alter the bit-rate to get better performance?

Sorry if these are rudimentary questions, but the only DAC I’ve purchased to this point is a Meridian Explorer 2 that I’m using in a PC audio setup & was pretty much plug & play. 

Thanks for any help...Hope you’re all doing well!

Thanks usual, you've all been very helpful!

I have 4 pieces of Bluesound kit in the house, a couple of first generation Node N100 players, a first generation Node N150 streaming Amp and a Node 2i.   I’ve used both the N100 and Node 2i pieces with external DACs, in which case both pieces perform the first MQA unfold, getting you all the way to 96K.   This has been the case with both my Bryston BDA1 as well as my Chord Qutest.
Thanks for sharing, @jazzman7...that's exactly what I had hoped for!

I believe the Denon DVD 2900 (I still have one in a closet) takes the DSD from SACD and outputs after converting back to PCM.  My player had no digital outs so you are relying on whatever internal DAC is in the player.
  Sony Universal players are capable of outputting the DSD from SACD over HDMI.  Bryston DAC3 have HDMI inputs.  I use a DAC3 with my Oppo 105 and it also sounds great with my Blusound Vault2 over toslink
@mahler123 do hear a considerable difference in the DAC3 vs the Oppo 105 DAC.