millercarbon likes to push people away from HT systems and directly into 2-channel systems because of his belief that HT is crappy. He does have an element of truth since you can get a much better sounding 2-channel system for the same amount of money, but you lose the center and surround channels. On a 2-channel system, the lack of a center channel will actually reduce the clarity and directionality of dialog - it actually becomes harder to hear movie dialog on a 2-channel system. Losing surround speakers will give you more of a mono sound that is not as open.
If you're looking for an HT preamp/processor that accepts digital and HDMI inputs and processes the audio, the Outlaw 976 for $929 is pretty much the cheapest I would recommend for "new". It also supports 4K HDR.
There's a used Integra DRC-R1.1 for $1250 on audiogon that supports everything, but it may be above your budget.
If your looking for a 7 channel analog preamp, look for a Parasound P7 on ebay.
$1000 is not going to buy you a lot. If you don't need HDMI at all, there is a McIntosh MX132 on audiogon for $990.
