There are a lot of variables here. When using digital audio, you are using the processor's DAC. You also have the benefit of features like bass management (assuming your mains are set to small). With an analog input, bypass allows you to pass the original signal (generated by the source's DAC) to the speakers without any changes. The 950 does allow for some bass management even in this case: if the mains are set to small, a copy of the analog signal is processed to generate a signal for the sub. Which DAC is better is typically difficult to quantify. In general, I would expect the 950's DAC to match or beat a DVD player's analog performance. The only player I've used that I felt had DAC's comparable to the 950 is the Yamaha DVD-S1500, but I don't know that it is any better with CD playback. As for the 950's performance in 5.1 with Dolby Digital and DTS, I consider it a great processor. As others have said many times before, the 950 is a great performer at a really sweet price.