To the best of my understanding when you use the analog outputs of your CD player it is using the CD player DAC and when you use the digital output into your receiver you will be hearing the receiver DAC.
Since I won't be able to hook up my 1070 until Xmas day I was wondering if I should be using the DAC in my Arcam CD73T or the one in the Outlaw. I know the Arcam has a good DAC and costs about as much as the whole receiver so I'm assuming it might be better to use the CD DAC in this case.
Any comments from anyone with more experience in this area are appreciated!
Thanks a lot.

I don't know anything specific about the Arcam, but as a general rule they have an excellent reputation and it will most likely have a better DAC than the 1070. I'd plan on using the analog, but you could toss a digital cable in as well and compare the two just for curiosity's sake.

If you hook your CD via the analog inputs, make sure you have full range L/R speakers and listen in Bypass mode.
If you don't do this, then 1070 will convert from anlog to digital, apply bass management in digital domain and then convert back to analog.
If you don't have full range L/R front speakers but still want to employ your CD's DAC, then use the L/R anlaog inputs of the DVD input, use 7.1 bypass mode and benefit from the little toggle button on the back, which has the option to apply an analog passive crossover at 80Hz.