Squeezebox Touch with no external DAC--Ideas

I am running my Squeezebox Touch with RAC cables to an older McIntosh Preamp(MX118) using a McIntosh MC206 amp. Mostly I stream loaded CDs from a computer using the latest ITunes program. The sound is very good. Question could I run the Sqeezebox digital thru my McIntosh MVP 861 CD player and do you think it would sound better. I know my preamp is dated. I listen to Thiel CS 2.3 and JL Audio sub. Thanks
Here's the short answer: No - I don't think your CD Player has a digital input, which you would need in order to feed the SB Touch through it. That said, the DAC in the Touch is actually pretty decent, though it can be bettered by more expensive DACs IMO. Among the SB streaming devices I've heard (most of them) it has the second best internal DAC, second only to the one in the SB Transporter, which I think is quite good. So if you want to improve on the sound, you certainly could by putting a better DAC in front of the Touch via an RCA Digital cable. What DAC you choose is really subjective in terms of what type of sound you prefer, but certainly the Touch DAC can be improved upon. The other aspect of the computer audio that you are utilizing that may make a difference is the software you use to rip your CD's as well as the format you choose to rip them in. In a nutshell, I'd choose a software with better error correction than iTunes offers. A few examples might be Media Monkey, EAC or Max (Mac). Rip to FLAC, AIFF or Apple Lossless. I would avoid using WAV, not because it is a bad format in terms of SQ, but because it does not support metadata and you may have problems down the line if you have re-orgainze your library, move files, add artwork, etc. And that was the short answer.
I hooked up my SB tonight. I have it running through a digital input (transparent d60) into a Mac MX-120. Am I correct in that I am using the DAC on my MX120 ? Are there better ways to configure it using my pre?
JAx2-Thanks for the answer.
Check out these SBT tweaks:


I'm currently using a Neko DAC with my Touch.