Seperate DAC or New AVR?


Looking for advice on which would be better bang for the buck upgrade for improved music performance: 1) A separate DAC like the VDAC or maybe the W4S UDAC, or 2) a new AVR like the Marantz NR1403.

System currently is Axiom M22 Mains (Also part of a 5.1) currently powered by a Pioneer VSK 1014 receiver (model year 2005 has the mofset amplifiers and had a bit of buzz when purchased due to these amps) with music feed from a Squeezebox unit with full FLAC files.

Need to keep this under $500 and still retain full HT duty (so can't go with a stereo integrated).

Please let me know your thoughts.
This is an interesting question regardless of price ($500 or $5,000). I think what it will come down to is room correction. I can tell you that when my DAC/preamp died, I started to run my music server (through a SPDIF converter) into my Integra Processor. To my surprise, the sound, once Audyssey corrected for room issues (despite the room being treated), was excellent. It may be audiophile sacrilege, but I am wondering if a very average processor with room correction could outperform a high end DAC in a non-perfect room. I am going to test this out over the holidays with Direc software and a borrowed DAC. It should be fun. If anyone has tried this already, please let me know.
Save your money. Getting a new DAC will only run into the limitations of the existing AVR, and getting a new AVR with a budget of $500 would be a marginal improvement over the existing one at the very best.

Having said that, if you can find a used Pioneer VSX-D912, you may be in business.

I have listened to the 914, which is reputedly not as good as the 912, and even the 914 was markedly better than my Marantz HT receiver.