New to digital audio

You don’t have to replace the iPod. Bluetooth is ok but you can improve the sound quality with WiFi or a direct connection. How does your current setup sound to you? If it sounds ok, than keep using Bluetooth. Some people are perfectly fine with it.

I would try to find another DAC/preamp. I would suggest an Emotiva XDA-2 or Emotiva Stelth DC-1. These have loseless volume controls unlike the XDA-1 which is lossy (sound quality decreases as you lower the volume). 

You could also get a stand alone preamp and just use the XDA-1 as a DAC. In this case, you set the volume on the XDA-1 to maximum and just use the volume control on the preamp.

I'm using the IPOD because it is what I owned when I put this system together last year. I know it's not a great source so now I am trying to figure out how to replace it in my system and find what's the best way to listen to my music. 
I'll make sure to use a direct connection .
I have a PC for a laptop.
Like I said initially above - I've done lots of reading about this but for this 70 year old retiree technology can be very confusing. 
Hadn't considered Tidal or any other service like that because I'm happy with all the music I own.
This system is in our winter home in FL - my cd collection in NH is too big to take back and forth so looking for the best way to listen to my cd's
 

Ipod? You fecking serious?

at the same time here, Bob, do some Research yourself.

or, do what most do and buy a Bluesound Node 2i.
it does BT, AirPlay, or uses its own I think.
also, a key part of streaming is the control app.
then get a trial account for Tidal.

but, enough with the “I don’t really know what a streamer is” BS...seriously.

if you don’t know that and have not taken the time to fine out, then you deserve to be confused.....sorry.

I have several comments for you.

WiFi or a direct connection would provide better sound quality than Bluetooth.

The Emotiva XDA-1 should not be used as a preamp. It’s volume control is lossy so you loose sound quality as you lower the volume. The Emotiva XDA-2 and Emotiva Stelth DC-1 have lossless volume control and can be used as preamps. You can find these in the used market. There are other DACs that can be used as preamps but most are more expensive.

Why are you using the iPod?

Is your laptop Apple or PC?

do you have good WiFi? Or do you need BT?

I think the WiFi is good where we are . I thought I needed the AE BT Receiver in order to hear the music from my IPOD ? TBH I think the IPOD is the weak link - every so often I get a sharp pop sound - at first I worried it was something else but I have used the IPOD in other places to listen and it does some quirky stuff. As far as budget I really don't know what a streamer is ? The Emotiva is a DAC but is older  - I picked it up used so I could also use it as a preamp. Any help is appreciated !!

I did exactly what you have done...then the light switch went on.

Ripped CDs into a MacBook Pro server then tried to figure it all out.
then I realized that 85% of my the music I have, and then much much more I don’t, was in CD and HR quality on Tidal.

so, no I just stream using an iPad.

what can you do for better SQ? A ton.

new streamer.
new DAC.

AE was about $180.
whats your budget?
do you have good WiFi? Or do you need BT?

Well sorry just saw on teh MusicDirect site that this isn't available anymore

I don't know anything about your audioengine, you might want to try an Istreamer DAC - link below - it is specifically made for connecting an Ipod to. I have one that I use in my headphone system and it is worth the money in sound quality to my ears. You'd bypass the receiver and go straight from the  istreamer dac to your preamp

http://www.hirestech.com/product/?pid=87