First, I think you mean ADC (analog to digital conversion), not DAC (digital to analog conversion).
Second, the AD-20 adds a minimum of 17dB gain (if memory serves). A typical SBD output may prove to hot for the AD-20 and will either [1] overload the analog inputs, or more likely [2] overload the AD-20s ADC since you're taking the SBD signal - which is usually a hot signal anyway - and adding the AD-20s minimum +17dB on top of it. So If you run RCA line outs from the board to the AD-20 you'll likely need some way of reducing strength of the signal before it hits the AD-20 - either [1] significant control over the SBD output level (to drop it low enough so tha the additional +17dB of gain in the AD-20 doesn't add so much gain that you clip the ADC), or [2] attenuators between the board and AD-20.
I believe the AD-20 offers both a S/PDIF mini optical and coax, If you're recording to JB3, use the optical. If you're recording to M1, use the coax + 7-pin into your M1.
An outboard ADC is worth it for SBDs, if the internal ADC is not up to snuff. Whether it's up to snuff or not depends on your ears. Personally, in this case, I'd run either:
SBD > AD-20 > JB3
or
SBD > M1