For budget speaker cables, Audioquest Type 4. Check out at Audio Advisor, I think they have a good deal on them. Yes, far better than amazon $12 cables, but I would keep Cable expenditures minimal for a starter system. Check out kimber PBJ interconnect as well.
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What DAC are you using, and why would you use its 3.5mm output jack?
For interconnects, I'll throw out a plug for @grannyring and recommend sending him a PM to see about him making some Dueland interconnects. That's was at I'd do if I was building my first budget system. I'd also buy some 3m lengths of Dueland 12awg wire from Parts Connexion and just use bare wire to connect to speakers, although grannyring might have thoughts on that too.
Another good way to go for speaker cable (and any wires in general) would be to buy used. Here's a nice pair of very good all-around cables for 400 bucks...
Best of luck.