Recommendations, should I upgrade DAC or CD

I am using a Meridian 500 transport with the matching 563 DAC. Would I be better off swithing to the 566 or get better DAC or would I be better off just changing to a better CD player. My price range is around 1500.00. Your advice much appreciated.

Meridian makes great DACs, players, and transports! However, to me they seem a bit laid back in presentation. Some folks like that effect...some don't. Personally, my short list is Arcam (have the CD73), Cary (303 and 306 line), and Audio Aero (just too expensive). On a $1500 budget - the nod would go to Arcam. I paid $627 for my CD73 - and have a modified cable feeding it into a Conrad-Johnson pre; and then the signal is fed into a homemade SET amp! I can tell you that for $1500 - you could really go up the Arcam line a bit! Find a dealer and give a listen.

About DACs. My experience with DACs is that they tend to exaggerate certain parts of the presentation; and while that can be very attractive at first audition - I find that it causes listener fatigue in the long run. Hope this helps!

Try your Meridian transport with some of the excellent value non-os DACs on the market like Audio Note, Audio Mirror, Scott Nixon, etc. The non-os design is simple and is not fatiguing. The prices would range from $500 - $750 new/used. You could then upgrade the digital cable with the money you save. I have the Audio Mirror and in stock form it is excellent. I paid $550 to have TRL modify it and now it sounds phenomenal. The best part, no upsampling, true 16/44.1 reproduction. Very analog sounding.
Thanks for the responses, I think I will try to find a better DAC some of the choices you mentioned may work fine any other advice is greatly appreciated. Which Audio Note should I look for? I also noticed in your other thread you like the Museatex.

Personally I would go with the Audio Mirror, but in the Audio Note line in your price range you're probably looking at the 1.1 or 1.1x. These are good units but to really experience the Audio Note sound you should try to move up to at least the 2.1x. Of course that will mean more dollars. I have never heard the Museatex, but I am intrigued by it. They don't show up here often and when they do they don't stay around long.