No, the DAC in the player is irrelevant. It will be bypassed completely & the signal sent to DAC in your reciever. So be sure you receiver has good DACs (there are really only a few different DACs used in 90% of the players).
The important thing is that the DVD player be a good transport. There's some debate on whether or not DVD players are good as CD transports or not. My opinion is that there's more than a little superstition and snobbery involved, but I can't say I've had the chance to exhaustively compare high end CD transports to comparably priced DVD machines.
I can say the aforementioned DV-563A makes a pretty good transport, at least to my ears. I have one, and I briefly compared it to my Denon DVD-2200. It seemed to me the Denon sounded a bit better as a transport, but two factors could mitigate that assessment- 1) The Denon was connected via coax vs toslink for the Pioneer. Coax is generally believed to sound better. 2) Could be an overactive imagination on my part. The Denon cost five times as much, so maybe I merely wanted it to sound better.
I should point out that finding a 563 might be tough- it's discontinued & mostly if you find one now it's a refurb.
Lastly, I just bought a Pioneer 656a with ModWright Level I transport mods & a Bybee on the digital out. It's also modded to accept a standard IEC power cord. I just connected it an hour ago, haven't had time yet to really listen, but I'm curious to see if a DVD deck specially modded for use as a DVD transport will sound any better than any other deck.
