best SQ improvement DAC under $1000 to pair with Bluesound Node 2i

What improvements and sound characteristics are you looking for?

At a friend’s recommendation I got a Schiit Gungnir Multi bit and it is a very nice sounding DAC. Clear but musical.  I felt it was an improvement over a RME dac I had before that.

My goal for adding an external DAC  is  open soundstage, better melodical definition and clearer instrumentation separation. Not necessarily clinical but more toward tube sound.

I paired my Node2i with a Border Patrol DAC (tube rectified) and it has delivered exactly what you described above.  Musical, great soundstaging and separation, easy to listen to. Base price is $1,075, so a slight reach over budget.

I’ve been more than satisfied, bordering on thrilled. 

I’d recommend the Musician Pegasus R2R DAC.  It’s $1099 but worth the stretch if you can.  Here’s a review in case it helps...

https://soundnews.net/sources/dacs/musician-audio-pegasus-r2r-dac-review/

Based on your desired attributes, I think a Denafrips Ares II DAC will be ideal.

A British Audiophile -- Denafrips Ares II Review

Dunno. Went from $250 to $500 to $3500.  Good luck.

Be aware that remote control is an issue.

CA DAC Magic

+1 Border Patrol. It’s sound is more organic, 

No longer new, but I was a big fan of the Parasound ZDAC

MHDT  nice  analogue sound

Get this and sell your Node and you're well under $1K.  

TEAC NT-505-B USB DAC Network Preamplifier, Black | eBay

I have no affiliation with the seller.

Denafrips!

Used benchmark.