I have a Krell integrated high-current amplifier, along with some electrostatic Martin Logan speakers. I am upgrading portions of my home theatre, and are trying to find a solution to a problem.

Do most good modern DVD (and BluRay/HDDVD) still come with an integrated DAC for analog processing? If so, are they really any good? I was contemplating buying an external audio DAC for processing the digital audio signals and passing that to my integrated amplifier.

I had previously run RCA cables from each component to the integrated amplifier, but I am now looking at upgrading to a DLP HD television, and possibly getting a BluRay or HDDVD player. How should I hook this up, given my integrated amplifier only supports analog and I have no desire to replace high end audio equipment with something newer just to gain the ability to process digital signals?

Thank you!