Sonic, I'd have to agree with you that greater gains would likely be had by restoring or considering an 'upgrade' to the aging amplifier and I'm glad that was mentioned here. I've gotta say though I'm a little disappointed in the black and white wording you chose in your responses, and how quick the OP was to believe them. Some amps do age well, and while its not likely, not all of them necessarily need work at that age or even older to perform at or acceptably near advertised performance. The initial response was also a let down referring to specs that in my opinion do not (within a tolerance of course) reliably predict the quality of sound without taking into account other factors. You can definitely benefit from source improvement with worse on paper performance then he is running if you have speakers that can keep up with the rest of the system, which for all we know, could be his real limiting factor.
On top of this, you didn't answer his questions, despite having the experience (in my opinion) to do so. Don't mean to put you down or anything, but usually I'm learning so much from your posts, and there is a chance of Scotto saving hard earned money to bet on misconceptions. What the heck? I wish my first post towards you wasn't of this nature. I'd like to thank you for all of the help you've been inadvertently giving me as I search through audiokarma.
Okay Scotto, since I'm already posting anyway here is the best I can do with my humble experience. As for the External DAC vs CD Player. I've asked remarkably similar questions as I'm currently saving for my first DAC, and gotten vague answers to my vague questions. I'll tell you this. More and more people are practically giving away their outdated CD and DVD players these days. It doesn't hurt to do some research and keep your eyes open. A cool thing about DAC's is that you can buy one, try it out, and sell it in a reasonable time frame for minimal loss since they don't tend to be weighed down by high shipping prices like the majority of gear in this game. Their isn't a ton of variability in their pricing with your budget to begin with either. If you feel one might work good for you, and you can afford a small gamble I'd personally go for it, especially considering the wear it could save your old CD player by using quality ripped copies of your CD's off your computer.
Your greatest gains are typically in your speaker placement, followed by the speakers, amp and preamp so if you are still at the stage where you want bang for the buck night and day improvement, that is something you should seriously consider.