A DAC connects between the source and the pre-amp. So you need a digital cable to connect there. The DAC outputs an anlog signal to your pre-amp which means you need a pair of analog cables for that connection.
There are a number of DAC's you can get. MSB has several different levels and I've hard good things about them. You can get them off of
www.audioadvisor.com. Cheapest is about $500 I think and you can pay as much more as you want. Perpetual Technologies is another wel reveiewed one for about $800 I think.
www.av123.com . I do recommend the modded DI/O though. Wayne at Bolder Cables does great work and can set you up quite well. You can buy one from
http://www.fullcompass.com/ for I think about $130 and have it shipped straight to Wayne for mods if you like. The unmodded DAC will be a decent step up from your DVD player but the modded will definitely be better.
I don't think you would have problems getting these things shipped to Canada, but I'm not the best source of information for that. As to things available locally, I'm not thebest source of information for that either. . .
Tim