As you are new to the hobby it is a great idea to start a thread like this. I would recommend 15% to 20% of your budget on a DAC and 20% to 30% of your budget on a separate and dedicated preamp. A good preamp will last for decades but Moore's law rules dacs. A $5000 DAC 5 years ago can get blown out of the water by a $500 dac today.
Analyzing DACs
As I am new to the hifi hobby, reading various product reviews and noting the details of the test environment have made me very confused. I understand Stereophile is the hifi bible. In the publication’s DAC published tests the reviewers almost always tested the DAC connected directly to the amplifier. I think I understand why—nothing in the chain influencing the DAC sound. Is that the correct assumption? If that’s the case why incorporate a preamp if the DAC has a preamp section that is a common feature even on high end DACs? I’m in the market for a new DAC. I’m trying to avoid unnecessary components if possible. Any thoughts would be appreciated. Thanks.