dac or new cd player

Generally speaking, carousel players make poor transports. They tend to produce high amounts of jitter. For less than what you'd end up spending on a quality DAC and a high quality interconnect, you'd likely get better results with a new single CD player. Some of the new units from Arcam, Musical Fidelity, Sim Audio, to just name three, are achieving sound quality that would cost and order of magnitude more just a few years ago.

If you tell us your budget, I, and perhaps others, can recommend some units.

Good luck with whatever you decide.

I guess I'll beg to differ about changers, when you consider that one of the best bang for your buck transports ever is a 5 disc Aiwa carousel changer that sold for less than a $100.
There are lots of audiophiles out there who can afford an expensive unit, but still use the Aiwa.

A DVD actually needs a more stable mechanism than a CD, so it may be just fine. There are some tricks to stablize the DVD player further, like putting a 5 lbs bag of sand or shot on top.

But anyway, Duddley is very correct that there are some very nice moderately priced single disc CD player out there currently.

It will come down to your budget. If your budget is small, then a DAC will get you a lot more performance for your $$. If you have a little money to burn, then a single disc player is worth exploring also.

I'm with Duddley ... the transport makes a big difference to the sound (yes it really surprised me!) and a Yamaha carousel is more than likely a bad transport. An Arcam player might give you a bit more sparkle.