<font color='#000000'>I have the RSX-1065 which uses the same DAC as your unit. I felt that the internal DAC was lacking in performance compared to my Sony DVD/SACD player. As a result, I bypass the internal DAC when listening to CDs in stereo mode but not for movies (Dolby Digital and DTS).
The differences I heard was better bass extension and resolution of details with the Sony compared to the Rotel. The Sony seemed to handle transients and dynamic peaks better. The Rotel actually had punchier bass but was also noticeably brighter than the Sony. In the end, I went with a MSB DAC mainly because I got it at a good price plus it also does a better job with poor/average recordings.
The caveat is that if you use any of the Rotel processing (Dolby PLII, music modes, DTS), the internal DAC will take over.</font>