DAC or Upgrade To MX150 From D2V??

My setup includes Nautilus 802's, a pair of Mcintosh MC303's and an Anthem D2V. When I listen to 2 channel audio from my Sonos (all ripped lossless of course) in Stereo, the audio is lackluster on the Anthem. I had a much better sounding preamp before so I know how good it can be, but alas I sold it and now have to deal with what I have, and trust me, I've tried everything. What do you think, should I purchase a good quality DAC and run the two channel via the (purportedly very good) analog direct on my D2V, or break down and get the Mcintosh MX150? Appreciate everyone's thoughts!
I'm guessing that you are running SPDIF from the Sonos to the Anthem and using the Anthem's DAC? Also, you don't say if you are making use of any other features of the Anthem for your 2-channel system (e.g., the crossover, EQ, etc.) The answers could affect the advice people give you. Also, maybe you could define what you mean by "lackluster" audio.

In your situation, if I felt the Anthem was the weak link, I would get an external DAC. The Anthem can last you for years of great HT, but DAC technology is evolving so fast that you'll probably want to upgrade/update your DAC more frequently, and it's cheaper to do that than getting a new high-end pre/pro. And it is unlikely that the Anthem's DAC would be competitive with even a moderately priced outboard DAC. Upgrading to the Mcintosh seems unnecessary.

You might also consider either 1) a USB DAC that you can play directly from the computer (bypassing the Sonos), or 2) getting an SPDIF reclocker for the Sonos to feed your DAC. Empirical Audio makes a product called the Pace Car that can be linked to your Sonos (with some modification) to greatly reduce the jitter. I've heard a system with that setup, and it was impressive. You might even consider trying that first, and seeing how the Anthem DAC performs with a reclocked source. If you are still unsatisfied, there are a lot of good DACs out there with SPDIF inputs.
Clarify - is the sonos attached via digital or analog cable?
I'm using the SPDIF (optical) from the Sonos to the Anthem. For 2 channel, I've set the "music" setting so the Anthem does as little processing as possible to the original signal (no xover, etc). I've setup my ARC (Anthem's Room Correction) targets to "flat" and 2 channel (FR & FL only). I've also tried not enabling ARC at all and bypassing every setting I could find -- to get as close to the source as possible.

When I say "lackluster" I'm comparing the 2 channel settings in the Anthem (using the internal DAC of the Anthem and as little interference as possible) with that of another preamp that I sold recently (unfortunately). The old preamp had a setting that was called "direct" where it bypassed a good amount of circuitry and tone functionality -- to get as clean a signal as possible to the amps. From my a/b comparison, the easiest I can sum it is: it appears that the Anthem "won't get out of the way". The bass response is subtly different and the high's are a bit harsh.

I've heard how good my amp and B&W main's can sound with certain source material from the Sonos' SPDIF on my old preamp, but for some reason the Anthem can't get as close. I've also tried using the analog out from the sonos to the Anthem, but it was terrible sounding -- just muddy all around. This wasn't surprising; I didn't expect the Sonos to have any decent analog out. I suppose the real crux of the question is if anyone has had good results with a good quality analog output (from any device) with the Anthem's 2 channel balanced input. My thought was that I'd buy a decent (under $2K) DAC and feed the Anthem with that for my 2.0 listening. Anthem claims the major cost difference between the D2V and the AVM50V is partly the analog section -- and that has a sort of "direct" feature. I'm just concerned about spending another $2K when I could probably just bite the bullet and sell the D2V and get the McIntosh MX150 (which in itself has some drawbacks such as a poor upgrade path and possibly not as good a 5.1 performance).

As a sidenote, I love the Anthem for 5.1. It's extremely good at cleaning up video and upscaling to 1080P. ARC does a solid job of also cleaning up my sub's response (a Velodyne HGS18). I just love it for 5.1.
Okay, thanks for the clarifications. I have a couple of suggestions:

1) Try dropping the optical and using a coax SPDIF. While optical is theoretically better, the general consensus is that the implementation of optical is worse than coax digital. I'm guessing that it won't solve your problem, but it's super cheap and easy, so it's worth a shot.

2) Consider the Wyred 4 Sound DAC-2. I just got one a few weeks ago and the more I listen, the more I like it. You'll find a lot of other users on A'gon who like it, too. But in your case, it will be especially interesting because it has its own volume control (though you'll probably use the Sonos' volume control)... and HT bypass. So the W4S DAC would feed directly to your amp -- no Anthem in the circuit for music. For HT, the Anthem's R/L outs would go into the W4S, and pass through, unmodified to the amp. There are various ways to configure this, but in your case you'd use the Anthem's 12V trigger out to tell the W4S to go into bypass mode. For $1500, it's almost a no-brainer.

3. I'll re-recommend the Pace Car. It will work with the Sonos whether you use the Anthem, or get the W4S DAC-2. (The W4S DAC has USB input, too, so you could use it directly from your computer, dropping the Sonos from the system if you want.)

Your biggest, most noticeable improvement will probably come from the W4S DAC. They have a 30-day return policy with a 15% restocking fee, so it's a $225 experiment.

But you won't return it.

I also own an Anthem D2v. I use a Squeezebox instead of the Sonos. Like Cbw stated, use the coax instead of the optical. Also, use ARC to clean up your room. I was dead set against using it because I paid big bucks to have my room analyzed and tuned. After talking to Anthem, they convince me to try it. It did make a difference and I've left it on. While the D/A converters are pretty good in the D2v, you can do better. Again, like Cbw suggested, I would consider the Wyred4sound DAC-2. The Sabre32 D/A chip in the DAC-2 is hard to beat at the $1500 price point. I would also suggest that you upgrade the power supply on the Sonos; the switcher is pretty bad. I've upgraded the power supply on my SB and it makes a huge difference. I think the boys at W4S offer a Mod for the Sonos. I would suggest that you call Anthem Tech Support. I've spent many hours talking to Pierro and the other Techs and they've been more than willing to hold my hand as I've suffered through many bouts of Audio Nervosa.
I recently purchased the Anthem D2v, and essentially a new system, for my family room system. This is a third system, used by my wife and daughter and so I had space and aesthetic considerations. I have the new Levinson 533 three channel amp powering three Paradigm Reference W5 on wall speakers (good WAF), a JL 110 sub, and Sonos, Directv HD DVR, and Oppo 83 as sources. In my dedicated theater room, I use the Meridian 861v4 with custom horn speakers, tube amps and same sources. The difference between the two is large in favor of the Meridian, and for the same price, or lower, I wish I had purchased a used Meridian 861 rather than the Anthem. The dealer, who also sold me the Meridian in a different store, came out and performed the ARC setup in the family room. I have used Sonos as a source in all of my systems and the Anthem is woefully short compare to the other two. The Sonos through a quality DAC is awesome and I rarely use a CD player any more (I use an EMM lab DAC in my separate 2 channel system, the built-in Meridian 861 DAC in the theater system, and the built -in Anthem DAC in the family room.) I have also tried toslink vs. Coaxial digital between the Sonos and the Anthem and there is no discernible audio difference. Perhaps I need to try a separate DAC for the Anthem, increasing the cost. BTW, IMO the value of the Anthem is it's video capability. I am very impressed and surprised that it has made my plasma picture much better, through all sources. I also like the ease of use of the Anthem. However, I am underwhelmed with its audio capability.

Hope this helps.

Thanks for everyone's feedback. I'm very interested in the Wyred4sound DAC2 based on all I read...sounds like a good fit especially since 99% of the 2 channel music listening I do is via the Sonos. Any additional thoughts/gotchas? I can't seem to find much of a user guide/manual for it. Does the remote use IR or RF? Can you engage the bypass without having to use the 12v trigger? What about other potential DAC's (unker $2K either here on Agon or new)? How about the PS Audio PWD? Does it have the sort of "bypass" functionality of the WFS?

For those ARC fans: I've tried ARC for my "music" setting, but I didn't like the results. I worked with a lot of folks from Anthem and tried countless configurations, none to my liking. I'm a firm believer in ARC for my 5.1 channel entertainment, but when it comes to music, I want to listen to sources undisturbed....warts and all! I like the coloration and somewhat high bump my N802's have in the lower octave. I'm a firm believer that sometimes a flat response is not necessarily what everyone perceives as good sound - that's what is so great about the pursuit of good sound. I may love what you hate. Some of this is very subjective.
The SPDIF has an abnormal clock rate. IT's not to AES/EBU standards. Call and ask for Piero Ferrari at Anthem. This is the reason why the Wadia i171 has issues connected via SPDIF.
@Javsystems - Isn't SPDIF a cheaper implementation of AES3 to begin with? I don't think the two are even the same.

I tried the coax instead of the optical. I can detect a slight improvement, but nothing that is comparable to my old unit. I'm buying a W4S DAC2 in the meanwhile. It's a no-brainer (also found and read the docs and reviews). Thanks Cbw723 for the recommendation.

Is the D2V is a good choice for an audiophile? I don't know if there's a better alternative at this price point that includes such great multichannel performance, video performance, upgrade path, etc. So for me, if I can find a good way to keep my D2V and use my gear for 2.0 with something like the W4S, I can't see ever getting rid of the Anthem. Did they misjudge their audience by not offering better 2.0 performance?
I just wanted to update the group as I got my Wyred4Sound DAC2 last week and have been listening to it for some time now. I have to say it blows the D2V out of the water -- through and through. Transitions are incredible, clarity, the low-end is back. I can't thank the group enough for the awesome suggestion. This unit makes my equipment sound like it should.

I was a bit surprised that it has a break-in period. The manual says that after 100 hours some of the brightness goes away and even after 200 hours it should start to level out. I basically have been "burning in" the unit as it's been on since it arrived. It initially did have that brightness and I was almost disappointed had I not read the manual. Sure enough, at about 100 hours later it's smoothed out very nicely...can't wait till 200, but in any case it blows the D2V away. My only complaint is that my remote came smashed up, but I sent them an email and my replacement is on its way. I still may end up replacing the D2V with the McIntosh MX150 some time in the future, but for now I can't be happier with my 2-channel setup and the D2V does a great job at 5.1 and also with video.
Keep burning it in Allen bh...I definitely noticed differences like you do at 100, and at 200. I'm probably around 275 or so now, and it seems to have settled in well. Very nice DAC, very happy with it, no more brightness, very detailed, yet warm sounding, good bass.