I don't know about the DAC, but I have read that 3.7 is the last firmware version. My HTS 7.1, which I bought used a year ago and do love, is version 2.6. I emailed Krell several times before getting a response, to check on upgrading the firmware. They were not very helpful. They told me to forget the upgrade and just buy their new Pre/Pro, which is many thousands of dollars. At this point, I don't know what to do. Don't know if my problems are helpful to you.
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