I agree with Mjaudio completely. The MC-1 is hands down the best unit for Home Theater (at any price IMHO). As a stereo pre-amp it is "Mid-Fi" compared to what a separate DAC/Pre will do for you. With the right DAC/Pre, change in sound should be closer to the "jaw dropping" end of the scale.
Lexicon MC-1 vs. high-end DAC
I currently have a transport feeding a Lexicon MC-1, use the MC-1's DACs to feed Krell amplification and then Dynaudio Contour 3.0 speakers. I'm curious how big a difference I will get out of adding an analog path for music playback - the MC-1 converts everything to digital and back again - and how high-end a DAC compared to the MC-1. I listen mainly to rock, pop and jazz. I've made changes to the system in the past that have been everywhere from jaw-dropping to un-noticeable, and I'm wondering where on that scale this type of change would get me.