I put a DCC decoder in my 2 Märklin steamers. I also wanted firebox flicker. Robert Ray has done this before and has archive photos. Decoders are smaller now so much easier.
Lenz Silver Mini, Digitrax DZ125 or CT Elektronik are the only ones that will fit under the cab roof. CT Elektronik is the smallest but will have unfamiliar values for many CV's beside the standard NMRA ones. Lenz defaults BEMF on and it does really strange things with Märklin motors !! Lenz and CT only have 0,5A motor current rating and Märklin motors are all over the place current-wise. They typically draw at LEAST 0.1A, many draw 0.2A and motors that are heading for failure can easily draw up to 0.5A so be careful with any decoder. Digitrax easily fits and can handle up to 1A but I wouldn't trust that spec. BEMF is NOT turned on with Digitrax.
Cut the inside cab roof tab. Observe all the locations that could make contact with the decoder wires. Make sure you put tape inside the shell to prevent shorts. DO NOT PUT TAPE ON THE DECODER ! The yellow tape below is to hold in place while I solder everything.
Cut the wires from the frame pick up to the motor. Careful because the capacitor wires that hold the brush tension can also now slide out. Use tweazers if you have to put them back in.
Solder the red and black power pickups to the frame leads. Red to the right.
Solder the grey and orange wires onto the motor and insulate. Orange to the right.
Should look like this:
LED headlight next.