Thanks, Don, I just read your answer to the OP's question and agree with everything you said (except that RCA stands for Radio Corporation of America)! After I posted my post, I looked up the Pro-Ject pre box S2 and see that it does support DSD512, but, since it has only 2 channel analog outs, it's not multichannel. When you say "NO", is that because nothing supports what I want, or one of the interfaces doesn't? In the database of DACs, published by NativeDSD, Very few do what I am asking for, and a few do DSD256 5.1 (including my Sony UBP-X800!). But I'm not asking about the DAC part, just the D-to-D format conversion part.
You're right, that was my typing mistake. It was supposed to be "think of the A as analog, and the D as digital. Like an easy way to remember. I wrote it wrong. LOL
I said no because like with the OP it's my personal belief that the DAC in your Amp is almost universally going to be the better one and, one perfectly capable of your needs. So like AcuDefTechGuy, and others posting here, buying an external DAC looking for some improvements could be as useful as trying to find the greenest piece of grass in your yard.
People with very expensive, top end equipment may be perfectly within thier rights to blow money on a full system of separates. And they may swear the $3,000 DAC is clearly better. But that's not you and me, and it's not real life.
And just because they make a $300 separate DAC or whatever, doesn't necessarily make it better than the one you already have. I mean if you want a rack or whatever full of components, sure buy whatever you want, use the cable options to choose which DAC is doing the work. But it seems unnecessary in your case and the OP.
I have nothing bad to say about your equipment referenced. I just personally don't think you need to go down that path.
This is just my opinion. In the vast scope of knowledge available here, I'm basically a step above noob. But I understand some things. And I admit that for the price point, Marantz and Denon both make perfectly acceptable DAC components. I say this from personal preference but also experience. Also you already paid for it.! I think you also have Marantz? Or did I get crossed up..?
Either way, run a decent Toslink optical /or preferably an HDMI to your AVR and you "should be" just fine, happy. If not, I just don't think the reason will be the DAC. Unless of course I completely misunderstood your original issue.