Good cd player and a great DAC or great cd player?

Thanks for your input. I should clarify that the 20k system will be a work in process over several years. I have heard those systems (and several at the 5 and 10k level) and enjoyed myself immensely. On the other hand, I know that dropping that number on my wife at one time purchase would lead to a quick divorce settlement, LOL! In the meantime I have considered an upgrade path that will give me greater musicality without a lot of lateral moves that will surely end up costing me more money in the long run. To that end I have thought of an upgrade path such as:

1. 2.5k cd player
2. 2.5 k integrated amplifier
3. 2.5k speakers
4. sell the source and purchase a 5k cd player
5. 5k preamp
6. sell the integrated amp and purchase a seperate 5k amp
7. sell the speakers and purchase 5k speakers

Make sense?

Tobias,
Wow, what a detailed reponse. I really appreciate the time and consideration you put into that. I've actually spent a bit of time listening to a number of sources, amps and speakers and have concerns about taking what I think might be a small step up with the Music Hall or NAD cd players. I've heard Music Hall and found it not to my liking with several different speaker (ref 3a, Totem, B&W NT's) and amps (Shanling, Linar, Passion). In every case I found excessive sibilance and a tendancy toward a bright presentation. Quite surprisingly, my current system is acutally musically fairly satisfying. I think that the NAD receiver and PSB speakers may err on the side of warmth which may mask some of the harshness associated with my entry level Marantz source. I know I'm not gettin gthe level of detail that I aspire to, but it's not to the point that I have to use it only for background music.

The source that I have most appreciated was the Audio Note 2.1x. To a lesser degree was the Musical Fidelity a3.2. Both made a significant impression and upgrade over my current sound. Did I just answer my own question? LOL! Are their other sources in between that I should listen to that might help on the cd player vs. DAC question?

Thanks again for your input. I certainly have come across the "best laid plans", challenge. I was recently offered a Jadis Integrated Orchestra amplifier at a very, very good price and I'm finding it hard to stick to upgrade path. My path is based more on principles than components right now. Certainly, I could take a giant step and select 3 components at my intial upgrade phase but that would upset the budget - read wife. I am therefore consigned to upgrading a piece at a time. What may present as a great speaker now, might seem less so down the road when I upgrade that component. Therefore, I get to continue enjoying the journey while saving for my next purchase.

As far as falling into money - that's unlikely. However, if I can save about $160 a month, I'm able to meet my 20k objective in about 10 years. I don't plan to wait that long to drop the money - I enjoy the tinkering too much - but given my income, I don't think it will be a challenge. This means a new source this year, integrated amp the following, speakers the following, etc. If I'm able to purchase wisely, then I hope to lose only about 15% on resale of my used equipment. Therefore while spending 20k, I hope, in the end to be able to purchase gear for around 17k. But if someone makes me an offer I can't refuse....

Hey Joy, thanks for your input. I'd be very interested in how that Bel Canto DAC sounds with your transport. I noticed you have the 950 with - holy moly- 7 monoblocks. I assume that when you mentioned integrated amps you compared av receivers to the av seperates that you have now, right? Can I ask what you compared to the Outlaw?