Pete,
The digital only Enthusiast level mod for the SB3 does removel the analog section to reduce noise from the DC lines. The FULL Mod will also have the removal of the same parts but uses higher grade parts to rebuild the analog section. The very noisy op-amp stays out of the analog section so the output level is reduced to a max of 1.2 volts, down from 2 volts.
The Enthusiast level mods now feature a custom built voltage regulator to supply the clock and digital buffer with cleaner power. This will improve the sound quite a bit on both the analog and digital sections.
As far as analog mods sounding better than some DAC's, that is what I have found. I have not heard anywhere near every DAC on the market, but of the one's I have heard, I have preferred the sound of the modded analog section of the SB3 to the outboard DAC. Without question, there may be a DAC out there that beats the sound of the SB. I have not heard one, yet.
Again, the analog mods to the SB3 do reduce the overall gain and invert the phase of the unit. If you can live with these limitations, you can get some VERY good sound for not a lot of money.