I've also got a Denon DCM-370 (I'm a big HDCD fan), with Sennheiser 580's thru a Creek OBH-11. I, too, wanted to maximize my source before I upgraded my headphone amp, so I purchased a used Muse Model 2 DAC, which blew me away listening to a used piece in a hi-end store. The Muse was Stereophile class B in its day, and went for about $2400 new (I got one with HDCD). At home, the difference between the output of the Muse and the Denon was minimal at best (which was a great surprise to me. I auditioned the Muse with a Cambridge Audio D-500, which the Muse crushed; I had assumed the result would be similar vs. the Denon). I spoke to a tech guy at Denon to make sure I was running my digital out cable properly (I was), and he was tickled that the $299 Denon (I got mine for $89 at ubid) held its own with the $2400 Muse. (There's also the chance that a dedicated transport might get more out of the Muse than the Denon does.) I am actually considering selling the Muse, using the Denon alone and putting the proceeds towards an amp upgrade, likely a Headmaster. I would like to audition the currrent Cary CD players, particularly their new CD-308 which is borderline affordable at a $1500 list; they all have HDCD, many have upsampling and they're built like tanks. If the 308 delivers more than the Denon, then I'd upgrade the source. Until I hear something better, I'll stand pat.
Does that answer the question?