OP, yeah, sure you can use the 203 as source and preamp, after all it has variable output in addition to fixed output; but, serving a preamp function, the 203 has very limited accommodation for source components, other than streaming sources via stereo usb B. At any rate, don't expect to hear a sound improvement from 203's DAC over just sending digital output to AVR. The AVR will get you better bass management too. BTW, my Parasound P6 ESS DAC seems to deliver the same detail and black backgrounds that the twin higher grade ESS DACs from my OPPO-205 deliver; plus, I have much more control of bass.