Should Speakers come first in a gradual upgrade?

I got info hi-fi audio about a year ago, and I have what I consider a pretty balanced relatively low cost system (high cost for me because I'm just an airman in the Air Force): Monitor Audio 5i speakers, Audio Refinement Complete Amp, and Cambridge Audio D500 CD Player. Conneting it all together are a Transparent Audio Super RCA interconnect, Transparent MusicWave speaker cable/jumpers, and stock powercords. I have a budget of $1000-$1500 (plus whatever I can sell the stuff I'm replacing) to upgrade my system. I'm very happy with its basic sound now, though I'm looking to get smoother highs, a little more detail, as much of a 3d soundstage as I can, and more solid low end. With that in mind, I'm thinking of going to a mini-monitor/sub system. I'm wanting to spend all my budget on upgrading just one component to the highest quality I can afford now, and I'll upgrade the rest when I can (it'll probably be an 8-12 month wait before I can do another upgrade). The question is, is that a smart way to go, and if so, what component should I upgrade first? I've thought about replacing the CD-player with an Arcam 92. But then I've been thinking that getting a Cambridge Audio S700 DAC (includes HDCD decoder) w/ Transparent's premium digital cable may give me a sound equal/better/close to a $1500 player at a lower cost. I'm pretty happy with the sound of the Audio Refinement amp, so I'm not planning on replacing that anytime soon, plus I think upgrading the amp will have the smallest effect on getting the sound I'm looking for, as opposed to upgrading the speakers or CD player or adding a sub-woofer (am I right here?). As for speakers, I want to replace the 5i's with a premium mimi-monitor, and one that has caught my eye is the Eggleston Works Isabel. I think it has fantastic looks, and it has the dynaudio esotar tweeter which should give me the highs/detail/sound stage I'm looking for. I'm concerned though that the Audio Refinement amp will not adequately power the Isabels (the amp is rated at a very solid 50watts). Any other monitor suggestions? It seems like the Dynaudio 1.3's keep coming up, however, I don't have a way of auditioning them, and the Isabel seems to be made to a slightly higher quality and with higher quality parts (esotar tweeter, hovland musicaps, vishay resistors, cardas rhodium posts, etc). Finally, I plan on getting a REL Strata III subwoofer, with plans to get a second one down the road. I don't want to get the subwoofer now, because I think the bass in the 5i's are fine, though lacking in weight and extension. Plus, I'd rather get the better highs/detail/soundstage now, and wait on the bass. My ultimate goal is to build a great sounding system with the afore mentioned qualities for 8-10k, and I'm hoping that whatever component I get now will be a part of that 8-10k system. So I'm left wondering what should I upgrade first? What will make the biggest difference now? And what should come next? Thanks in advance for helping me out. Oh, my music tastes are diverse...some of my favorite tunes come from Sting, Cat Stevens, Itzhak Perlman, Peter Gabriel, Beethoven, Andreas Vollenweider, Stevie Ray Vaughn, and Led Zeppelin.


p.s. Any other military audiophiles out there?...I haven't met any's hard to explain to your fellow soldiers why you aren't crazy for wanting a 10k stereo that doesn't even have "surround sound".
Put the 1500 in a source or Dac
The Audio Note 1.2 DAC is a very good sounding unit.
I would get the REL sub now. It will solve all the problems you state that your speakers and the rest of your system currently has. Your system is well balanced now. The Complete is only a 50 watt amp, so you may have trouble powering some higher end speakers to get them to sound their best.

The reason the REL will improve your whole system is because it is not only about low frequencies. Even mid and high notes encompass a much larger spectrum than the principal note you hear. For example: if it was only about the principal note being played, then you would not be able to tell the difference between a piano, violin, oboe, flute, etc; if they were playing the exact same note. Also why a concert grand piano sounds different then a small upright piano. There is a lot more going on.

The hardest thing for a full range speaker to reproduce with detailed accurately is bass. The REL will fill in the bottom of all notes being played by all the instruments, which will make your midrange fuller and enable you to differentiate between even slight changes in the high notes. If you listen to classical, it will also help separate the low notes played by the cellos and string bass, resulting in a more musical experience.

Since you are willing to spend $1499 which is what the wood veneer Stratus III costs (list price),(black is $1299); you could go for a Storm III in black which lists for only $200 more ($1699) and is a good step up (wood veneer Storm is ($1999) Places like Ambrosia Audio usually discount.

I'd say your biggest BFB would be a quality powered subwoofer e.g. Carver or Velodyne. DO NOT underestimate the effect of a good musical foundation and how it highlights the rest of the sonic spectrum. If your living quarters don't allow you to exploit this approach then the Isabel makes great sense. Good speakers get better with upgrades to other system components! BTW, Solid list of musical intrests... Have you heard Fred McDowell or Captain Beefheart?
If you are happy with the overall sound quality of your speakers, I would go with a better source or DAC. As I have upgraded my source and electronics, my relatively modest speakers (Vandy 2ci) have sounded better and better.
The Swampwalker response is the correct response. When improvement occurs with source then it follows throughout the system. Better source will enable the speakers to image better, improve attack and even provide a more solid bottom end.

I like the DAC idea. The Audio Refinement is one of my favorite pieces. Transparent makes nice stuff also. Not so familiar with the speaks but I will bet the whole thing comes together better with a DAC upgrade.

You need a powercord upgrade too for the digital end.
LAT International makes nice ones for under $100. Check out They are surprisingly good for not much money.
I agree with the DAC change suggestions. With your system the time to change the speakers and add subs would be a little later. If you really want to get apiece you can keep in your ultimate system I think you should be looking at higher end DACs. Here are some great sounding ones:
EVS Millenium II DAC ($1050 new occasionally a used one comes along for $700-$850)
Bel Canto DAC 1.1 ($1425 new/ $750 - $850 used)
Perpetual Technologies P-3A ($799 new)
Dan Wright modifies these for $400 turning them into something really special
Kora Hermes ($1500 new)
MSB Gold Link III (list $1800, but can be found for around $1200 new) - I personally don't care for the MSB DACs

You might even find as I did aused Muse Model Two-Ninety-Six for $1300 -$1400 - this is a state of the art $4000 DAC

Any of these DACs would be at home in an $8-10K system.

Good Luck
I really don't like the Transparent cables. I have done aq lot of comprisons and Transparent was the worst being easily bettered by Harmonics entry level. I believe the digital can be improved also, but you should at least demo some new cables like the Acoustic Zen Wow ic's for $249 and their Satori Speaker cable $599 or even the entry level HT cables. I would usually recommend other upgrades before cables but those Transparents are stinking up your system.
We (wife is an audiophile too!gloat.) have a pair of 5i's that served as surrounds in a previous theater. A couple of Saturday's ago, an audiobuddy showed up with steaks and a new Cary pre-amp. Knowing better than to start pulling apart an existing system, we grabbed the 5i's out of the spare room along with a dormant Cinepro 1K2. A Marantz (modified)CD and a handful of cables later, we lit the speakers. They were nothing short of astonishing! By the time it started getting light outside, the little speakers had Wireworld and PerfectConnection cables, Rogue Audio monoblocks, EAD transport and DAC and of course, the
Cary. We all felt that the 5i's could have still gone a step or two. They are truly amazing little speakers. Placement will make significant changes in bottom end (they don't really need a sub), they love tubes, and are very rewarding of good cabling. If you have not yet done so, it is mandatory to fill them with lead shot (sand is for playgrounds). Ours have 34 lbs. each. The change is remarkable. Next step, changing out the crappy connectors with wbt's, will let you know how that goes. Thanks for the chance to share our findings...
I started out along the same lines as you-with a modest system consisting of and NAD cd player;Jolida 502 integrated tube amp;and,Spica tc-60 speakers.When it came time for a major upgrade,i started with the source,and have never regretted it.I purchased a Meridian 508.20 cd player.It transformed my system,bringing a level of musicality out of the spica speakers that i did not know they were capable of.Yes,we're talking about a 3k source with 500.00 speakers.Poison dumped in the river upstream will poison the waters downstream.Since my purchase of the meridian,I have up-graded all my other equipment.Had i not purchased the meridian first, i do not believe that i would be getting the best out of my new system.
Both the subwoofer and DAC camps make their cases well. Here's a suggestion on how to play. Buy Ric Schultz's EVO Millenium II DAC (for about $160 you can also get his digital coax and analogue interconnects). Blows away the Perp Tech P1/P2/P3(Wright-mod) in my experience.

If adding a quality dac "does it" for you that's it. If not, return it within 30 days for a complete refund. Since music is your interest go for the Storm over the Strata without question.

Not familiar with your wire so can't comment. Most would agree that it's system dependent so my opinion wouldn't mean much anyway!

BTW, one thing I'm sure all of us can agree on is that we appreciate what you are doing for us out there - God's speed and keep your head on a swivel.
I have a pair of the 5i's in my home theatre system and have found them to be very transparent. Changes in the source and cables in this system are quite noticeable. I, like you, prefer sacrificing bass for better mid/hi performance so I wouldn't add a sub yet. Filling the 5i's with lead shot will give them more/tighter bass repsonse so I would recommend doing this at least. As others have suggested, I would upgrade the source (in the form of a CDP), then experiment with cables that suit your taste. Good luck.
I wouldn't change anything for now except bringing in $1000 worth of analogue setup (something like VPI HW19 Junior with arm/cartridge)
Believe me it will bring more bass, more detailed highs and cheep-fast-growing analogue musical collection!
Gil-I will not waste your time with audio non-sense! But I do know another AudiogoN member who is in the armed service, he uses the moniker Pcc(his name is Pete), though he has not been here in a while. He and I are fairly good friends, despite never meeting each other! He has similar complaints of being under paid in an expensive hobby, his wife(WAF, damn it got anther one!) has extinguished his audio budget and is no longer aloud to come out and play with us, but I think he sneaks in every now and again. Try sending him an email I know he would like to here from someone in a similar situation.
Another source first guy. If you're considering the Arcam 92 you might also want to try out the Linn Genki. Make the REL your very next step though! I don't care what anybody says, every pair of speakers needs a REL.
Thanks for all the suggestions. They confirmed my suspicion that the speaker upgrade should wait in favor of either a better source or sub. I'm still not quite sure what to get. I'll audition some DACs to see how I like the difference. An idea I'm leaning towards is to get a cheap powercord upgrade for the CDP (~ $100), and the cambridge audio DAC, which my dealer w/ sell me for ~$400 (demo unit). That'll leave me enough left over to pick up a used REL. The DAC will have to be upgraded again, but should give me a decent improvement in the mean time. Plus I'll have all the benefits of the sub. Grandpad, why should I defintely get the Storm over the Strata? I'm planning on eventually getting a pair of subwoofers (not for the extra bass, but because of all the other sonic benefits forum members have noted when adding a second sub), so I was going to go for the cheaper Strata. I could care less about bass quantity, I just want quality and enough extension and weight to make pipe organs and such sound realistic. Dweller, I haven't heard of the musicians you mentioned, but I'll definately give them a try. Dburdick, nice to see that the 5i's are so receptive to better equipment. Be sure to tell me how those WBTs sound, because I was thinking about doing an upgrade to the binding posts in both the amp and speakers. I'll also try filling the speakers w/ leadshot (they're filled w/ sand now). Tim, I'll try to get in touch w/ Pete...too bad his wife put the foot down on his hobby. Thank God my wife tolerates it, and listens to the system daily with her own CD's. She even suggested that I should do an upgrade if the government follows through on its proposed 10 day tax free holiday shopping period (I didn't tell her I was already planning to do an upgrade regardless...).

Thanks for all the help.
Hi Tim, I'm sneaking in. As for the wife, she only has taken my budget away cause of my restoration on my truck and she wants another house. But eventually I will do another upgrade. Looking at the vandersteen 2wq(used sub). The sub I really would like to have is the kinergenics sw800, so anyone out there looking to support your troops; give me a deal on that sw800. Hi Gil, glad to see that I'm not the only USAF audio head out here. I agree w/the above mentioned, if you buy a good sub it will open up your mids/highs, giving your amp some breathing room. You are wrong about the amp thou, I upgrade 3 times on the amp and finally settled with the bak vk200(used $1,600). Each amp upgrade just got better and the vk200 is here to stay. My vk200 gave me the mids/highs/lows I was looking for. As far as cables, I'm very happy with the transparent thru out the system. Speakers are Martin logans aerius i, so the transparents worked nicely for me. As far as power cables go(if your a little handy, make your own) I audition an $800 power cord at home and took it apart. I can make the same power cord for about $50. Good luck, Pete
Tim - in my audition the Storm sounded more musical than the Strata, small diff but noticable. If possible try to listen to them both to see if the Storm is worth the extra expense in your application.

Good luck.