Help me pick a Dac

I can highly recommend Audio Research DAC2 for you. Currently there two units available, one here in Audiogon and the other other at High Performance stereo. I believe unit from High Performance Stereo has new caps installed. 

AR DAC2 is a solid state DAC built around Ultra Analog D20400A DAC chip, one of the best that has come to the market. If you are wondering, some of the top of the line DACs from  Stax , VTL, Manley, Mark Levinson, Sonic Frontier, etc., were designed and built around this particular chip. It is one of the best DACs in addition to Burr Brown PCM63 another best performing DAC chip. Both are 20 bit implementation and multibit DAC chips.

You can get AR DAC2 for $1,300, well under your allocated budget. Keep the rest for software.  

@adg101 AR CD2 is based on Crystal semiconductor CS4329 – 1 bit DAC. This Delat-Sigma chip is no comparison to the UA D20400 and they are universes apart. But I get your point. I think D20400 is so out dated people who owned Stax X1T, ML 30.5, etc., DACs were dumped to the second hand market and gone with the new latest and greatest DACs. There are so many of these DACs now available in the used market, one can buy those under $100 bucks!

But even the new DACs still have to work with the old geezer limited by 44.1kHz sampling rate and 16 bit word length subjected to quantization errors and what not. I get it, they have new clocking mechanisms like accurate for femtoseconds with >120 dB channel separations. I guess it was my bad that I didn't know OP could hear these differences.