Can't use a DAC with the Phillips. The digital out is for AC3/DTS not 16/44.1 PCM. AFAIK. I'd run the player as is for now and plan on getting some mods done. I bet this player would sound better with mods dollar for dollar than adding a dac (even if you could). Though time will see an we get feedback from those modding their SACD1000s.
Also, sorry to hear your financial situation is requiring you to downgrade you system.
Also, sorry to hear your financial situation is requiring you to downgrade you system.