Upgrade question: All in one or DAC?

I want to upgrade my digital side to higher levels, realizing redbook will never compete with the best analog.

I'm currently using an HHB CDR850 CD Recorder for playback (a professional recording unit from studio). It uses Pioneer's "Legato Link S" technology and sounds unnatural to my ears, especially compared to my analog rig. But it also has every digital I/O needed (AES/EBU, S/PDIF, optical, coax, etc.) so I could bypass the internal DA and use as a transport.

On a limited budget...would I be better served throwing a used DAC at the existing unit, or saving for a Jolida JD100? Or are there any better sub-$1000 solutions anyone can point me toward?

The rest of my system is posted, Plinius 8200 integrated to Maggie 3.5's. Listening encompasses the gamut of classical, jazz, rock, progressive, metal, pop, bluegrass, trance and more.

Any and all suggestions appreciated.