To DAC or not to DAC?

I currently have an EAD TheaterMaster-8 and PowerMaster 1000 and am planning on upgrading my Sony 7700 DVD player to the new Sony multi-channel SACD/DVD player rumored to be out soon. I listen to 70% music (rock/jazz)/30% home theater. Would I benefit from an outboard DAC like the Musical Fidelity A3-24 or other DAC in that price range?
PS I would like to thank Audiogon and members, this forum and site are priceless!
Gbm4th, I have a SONY 9000 SACD/DVD. I have added an external Accuphase DC-61 DAC and I am quite pleased with the results.

For Redbook CD, the Sony outputs a 44.1 signal which the DAC picks up and re-clocks. I then have the option of up-sampling or not, a very nice feature.

For DVD playback, I set the SONY to output a 48kHz/2channel signal from the on-screen menu. This is a 5.1 to 2 downmix for us 2-channel guys. The DAC picks this up and then re-clocks it. Again, I have the option of re-sampling.

I prefer the up-sampling option for both CD and DVD. The sound is virtually free from digital glare. There is a warmth that is free from edges and the HF is smooth but extended. When I elect not to use the up-sampling option, a bit of listener fatigue eventually sets in.

Of course, the SACD digital signal is not output... you have to use regular RCA interconnects to your preamp.

Good luck!
Another route would be to have your new Sony player modified by one of the more reputable tweak guys(i.e. Richard Kern, Dan Wright, Ric Schultz, etc.), and you won't have to mess with adding a digital cable into your system or worry as much about jitter(if the player is well designed and/or modded properly). The downside is the mods will probably void your warranty. The benefit of going the DAC route is that you can hunt around for the DAC that produces the sound you really like, whereas with a modded unit you pretty much are at the mercy of the sound that unit produces for better or worse. In any event, I would definitely do one or the other and not just stick with the stock Sony unit. Best of luck.
I recommend a DAC with the Sony gear - I feel that the Redbook performance of the Sony players is merely average, but with a good DAC you can enjoy the best of both worlds: playback of new digital formats using the onboard DAC, and Redbook via a better third party DAC.

It is certainly true as Soix mentions that you must use a good digital cable and a good DAC that matches the Sony in order to achieve good Redbook performance when using the Sony as a transport, but this is not an insurmountable problem and with some good advice you could easily outperform the Sony's onboard DAC.

My personal recommendation would be the Chord DAC64 which has a huge buffer and reclocks the digital output of any transport. It is the most flexible and universally compatible DAC we've worked with in the sense that it will work with transports that have unusually high jitter or are tricky to mate with DAC's for other reasons (clock mismatches, etc.) Because of the Chord's large buffer and reclocking, it sounds great on every transport we've plugged it into, and it is a 24/192 upsampling DAC with both balanced and single ended outputs. Retail is $3040. Feel free to email or call 773 324 1240 if you'd like to discuss.

--Evan Trent
Symphony Sound
EVS modified SACD players:
I quote:
"What?! no millenium DAC? What gives?
We have found that a player with super mods will beat most any DAC"
They modify Sony C333ES and C555ES, I think. But no more EVS Millenium DACs if I got the story straight.
Found the link:
don't dac