Should I buy a DAC?

I am trying to decide whether to buy a new DAC or a universal SACD/DVD-A player for my HT system. I currently have a Toshiba progressive scan DVD player with Optical and coax outputs. I run the optical out into my B/K AVR507. Thus, I currently use the AVR's DAC. I use the player only as a transport. However, I want to move into the world of multi channel SACD/DVD-A and the DAC in my AVR only has unbalanced analog inputs for the uulti-channel DVD-A/SACD format. Will my DVD player, which is not a SACD/DVD-A player, be able to transport the digital information to a stand alone DAC? If so, I could continue to use my current DVD player as a transport and invest my dollars more wisely in a DAC. I am looking to spend about 1-1.5K either way. Please advise me on what my best option is...Thanks.
None of the hi-rez multi-channel formats will work via a digital connection(There may be a few transport/DACs at $10,000+ that do it). To use the transport to play the hi-rez formats, you will need to connect 6 channels of analog interconnect from the player to your receiver(if you receiver even has a multichannel input).

The hi-rez formats currently only work in the analog domain, so all of the D to A take place in the player before it is sent to your receiver.

Your current DVD player will work as a transport using an external DAC if you set the DVD player to PCM output (instead of DD 5.1). And it will only work for 2-channel reproduction.


Actually that's not entirely correct. To my knowledge, hi-rez formats can be transferred via IEEE1394 firewire connection. For example, Pioneer Elite offers iLink compatible universal players and receivers.

Anyhow, the Toshiba cannot read SACDs or DVDAs. There is no DAC you can buy that will allow your Toshiba to play these formats. Your best option is to buy a universal player that may be an upgrade to your Toshiba in all aspects anyways. If not you can use both.
The advantage of buying a good DAC is that you can use it also with a laptop to play ripped CD's. This can be superior to any transport or player. This was demonstrated at CES last week.