Upgrade Path - Preamp or DAC?

What other sources do you use in this system? The answer drives need for a preamp. Some DACs have variable output which may remove need for the pre. Is this true for the 851D? See other threads regarding direct connection of digital source to amplifier.

If you don't need USB input you could search for a older DAC having a solid power supply and analog output stage which remain quite good using SPDIF input streaming. Can be bought far less expensively than many newer DACs and in this context just as good. Many come up used here on AG. Also less expensive than a quality preamp.

If needing a preamp, i believe that piece remains the heart of a system, and therefore requires a well thought out purchase. I owned a B&K ST-140, predecessor to your amp I believe. You could easily find a quality used line level pre to compliment this amp at a reasonable budget (<$1000). What would your budget be?

 

 

Given that you deploy 3 sources your emphasis on the preamp makes sense, with the caveat that there is more than one way to an end. 

On the digital side improvements in both CD and Heos playback can be improved with a DAC. For this you would need two SPDIF inputs that are compatible with CD player and Heos output. On the vinyl side the phonostage will be as important as the line level stage on the preamp. The purchase of a linestage preamp and separate phonostage is a possibility. 

I was in this same situation when I upgraded my system (after 25 years) which also included vinyl, CD, and the addition of computer audio.  I found that the digital sources were taking priority over vinyl so allocated greatest portion of budget on those sources. For me that was to purchase a line level preamp that was compatible with my amp and provide it with outboard DAC and phonostage. The DAC I purchased (used Bryston BDA-1) has several SPDIF inputs which accommodate my DVD player as transport and my computer via USB/SPDIF converter.

I believe you need to establish what your priority will be towards each source and allocate budget based on that. Let time be on your side, as that can help insure best decision making and increase potential budget.

Good luck, and keep us informed along the way. 

What TT/cartridge do you use?

I have no experience with that cartridge, however many on this forum have spoken highly of it within it's price class. Not knowing anything else regarding your vinyl system, considering this cartridge, I believe the phonostage within the Rotel pre to be a weak link.  That said, if you found a line level preamp you liked, you could still could use the phonostage within the Rotel until you identify (afford) a outboard one.

Regardless of system expense, balance is important, a single exceptional component will not be truly appreciated, one component as a weak link sets the standard throughout. 

Seems we are both up early. A step at a time is prudent. If where I live I had better internet connection I also would try Tidal.