The way I see it (and I may be wrong), while a decent offboard DAC should provide better sound quality from a 'cheaper' CD player, all it is doing is improving the transition from digital to analogue. The difference in the transport section between a £50 CDP and one costing £500 should be fewer read errors, providing a truer digital stream to the DAC.
You would expect the cheaper transport to do a poorer job of reading the CD and so it will provide less accurate information to the DAC than a better CDP plugged into the same DAC.
However, as with all these things, there's theory and then there's the real world which often don't match - the best way to determine this would be to try it for yourself and see what you think - if a dirt cheap player plugged into a decent DAC sounds good to you, then you're onto a winner - if not, try another player.
It would be interesting to see a comparison of players across the market though - from a supermarket job through to DVD players to mid range and high-ish end - just to see 'what a difference a DAC makes' (would have made a good title for this thread!)
EDIT: Just realised I didn't really answer the question in the title which to me is: No, but it can make it sound better than it currently does.