Forgive the length of this entry, but I am anticipating questions I am likely to receive and wanted to provide as much useful information as possible.

I focus on listening to the music and am not prone to frequent system upgrades.  When I do upgrade it is because the improvement in sound quality is obvious to both my wife and I and seems to be a good value. We both play musical instruments, listen almost exclusively to classical and jazz, regularly attend concerts, especially orchestral works, chamber music and small jazz groups.  The classical performances are all in venues with good to excellent acoustics, so over many years of listening we know how live performances should sound.

Several months ago I purchased a Lumin U1 mini digital music player after auditioning a Lumin T2 and comparing the DAC in the T2 to my current Ayre QSB-9 DSD DAC.  What became apparent was that the existing DAC was not the most significant limiting factor in our system.  By connecting the Lumin to my iMac via an Ethernet switch and cables, and using it as a player only, the clarity of the music improved markedly.  I attribute this to the reported higher levels of “noise” transmitted through the iMac’s USB connection.  The Lumin was “quieter” - less noise and distortion, and has the added benefit of providing us with an excellent streamer for our Qobuz Hi-Res subscription.  So I purchased the Lumin U1 mini, which is a digital player only.  (We use both the Lumin app and Roon to listen to our own digitized music and Qobuz.)

Having spent a bit of time reading threads on Audiogon, articles in various publications and talking to a few dealers, it seems that I might achieve further marked improvements in sound quality - clarity, detail and accuracy of reproduction, less noise and distortion, better soundstage - by using a music server as a file source and/or by upgrading to a newer DAC.  While the other components in our system may be improved upon, our experience in auditioning various speakers and amps over the years, including in the past 12 months, lead me to believe the digital source/processing is where the biggest gains can be achieved.  

Our current system for the main listening room consists of the following components.

Mac Mini i7 with music on an external Thunderbolt hard drive (RAID 1 configuration) 

Lumin U1 mini digital music player


Ayre CX-7emp CD player

Ayre K5-emp pre-amplifier

Proceed HPA-2 dual mono amplifier 

Aerial Acoustics Model 8b speakers

Transparent Plus (generation 5) interconnects

Transparent 10 ga. in-wall speaker cables (bi-wire terminations)

Audioquest Niagara 1000 power conditioner

Transparent USB (Lumin to Ayre DAC) and power cables

The purchases of the CD player, pre-amp, power conditioner and Lumin unit all made very noticeable improvements to sound quality.  Our digitized music collection now sounds virtually the same as, if not a bit better than the original CDs played on the Ayre CD player.  It was noticeably inferior before the Lumin was added to the system.

I’m seeking input from Audiogon members as to components they believe would provide the most improvement for the dollar to our current system, with an emphasis on digital music servers and DACs.  Let’s save recommendations regarding pre-amps, amps and speakers for another time.

With respect to music servers, a simple solution would be to replace the MacMini with the $1,200 Lumin L1, basically a hard drive and associated hardware designed for digital music use.  It can connect to my Lumin U1 mini via Ethernet, which I understand to be preferable to USB, with some recent suggestions to the contrary.  One downside is the need to reconnect to a computer every time you want to transfer a CD you’ve ripped or a file you’ve downloaded to the L1.  Local dealers also carry music servers by Aurender, Auralic, and some other more mass market brands.  I have read some good things about the sound quality of Innuous servers, but there are no local dealers and I am hesitant to purchase anything that I cannot demo with my existing equipment in my own listening room.

As to DACs/processors/combo units, I would automatically be disposed to the Ayre QX-5 Twenty given my experience with the company (excellent response to customer inquiries, great upgrade policy, outstandingly neutral sounding products).  Local dealers also carry the Lumin X1 (which would require trading in or selling my Lumin U1 mini, which is fine), the MSB Discrete (and its more costly brethren), Berkeley Audio Designs, T+A, Aurender, Auralic.  An out-of-town dealer with whom I’ve dealt carries some of these same brands plus Naim, dcs, Linn, and others.

As to budget, let’s say that depends to some extent on the performance the product.  For the purposes of discussion let’s say up to $5k for a music server and up to $10k for the DAC.  A bit of stretch is possible and the combined total would work for a combo product, but past experience suggests different firms have strengths in different areas.

I am particularly interested in thoughts about whether a music server or new DAC would provide more improvement.  I've read the past comments of the bits are bits naysayers and can confirm that just switching from USB to Ethernet connectivity made a big improvement.  So bits transmitted with power and circuit noise are inferior to bits transmitted with less of both!

Your feedback is sincerely appreciated.      

Have you replaced the wall wart for the Mac Mini with a LPS?  If so, have you replaced the stock power cable to the LPS?  If so, have you replaced the 12vdc umbilical cord from the LPS with an aftermarket umbilical from Acoustic BBQ?

You can upgrade to Synergistic Research Element Copper interconnects and power cords, put Blue Quantum Fuses in all your components, treat them all with ECT and treat the room and speakers with HFT, and all for well under $5k. There is no DAC or server made at any price that will get you as much improvement.

So you don't need to stretch financially. Just mentally.

I would suggest start with the ECT or HFT, they all come with a trial guarantee. That way you will know I know what I'm talking about and be ready for the Elements, which being used will have no guarantee. 
In terms of streaming the devices you mention duplicate the functions of your Lumin U1 which is a streamer/renderer. Most of the devices you mention are also streamer/renderers but what you need is storage. In my opinion you would be better served getting a good NAS drive such as a Synology and using that for storing your music files.

You can get a good NAS for under $1K and stream the files from that to the U1. Going such a route also gives your greater flexibility down the road if you need to add/expand your storage.

I don't have a comment on Dacs other than if you like the sound of your Ayre Dac then moving up the line sounds like a fine idea. I know you said you didn't want amp recommendations but I have to say upgrading your amp to an Ayre amp would give you great synergy. Also I suspect a nice upgrade in sound over your Parasound,
@steakster the Mac mini doesn’t have a wall wart. 
I agree with @jond.  I have the Lumin U1 and use a Synology NAS and the Lumin L1 NAS.  Either one work great.  Don’t waste your money on a server, use a Synology NAS and run the included Minimserver.  Lumin recommends minimserver.
jond and sfseay - Is the power supply and internal circuitry of a NAS any "cleaner" than that of a MacMini?  I've considered a NAS  My local Lumin dealer uses one, which suggests he may see little benefit to a dedicated music server, even though he sells them.

sfseay - You indicate you have a Lumin L1.  Do you notice any improvement in sound quality between it and your Synology NAS?  There is little difference in cost between the L1 and a decent NAS.
thyname - Thanks for the link to the pre-owned Ayre QX-5.  If I go that route I will definitely consider pre-owned given the quality and reliability of the Ayre products I own.

jond - As to the Ayre amps, frankly I auditioned prior Ayre amps and passed.  My old Proceed (serviced twice by a highly qualified center recommended by my dealer), which is a Mark Levinson design with a Proceed label, is an excellent match for my power hungry, 86db sensitivity speakers, with 250/500w at 8/4 ohms.  My speakers are nominal 4 ohm and operate at 3 ohms at certain frequencies and loads.  I recently did an in-home audition of the top of line Luxman integrated amp at 120/220w at 8/4 ohms and it clipped badly at moderately high volumes playing classical music.  Will consider amp upgrades at a later date.

miller carbon - I've followed some of your responses on other threads and appreciate your input.  Frankly, I need to do some homework before I can ask some intelligent questions.  
miller carbon - Can you direct me to a web site that explains how CFTs and HFTs work?  I read a little on the Synergistic Research web site. Their web site provides very little explanation.  Since they sell the products, I'd prefer some input from a neutral source that has tested such products. You have to admit that sticking stuff on the wall and ceiling of your room and on the speakers, or inside your electronics sounds a bit out there.  If they work, why don't manufacturers, particularly high-end product makers, install them in their products?  Pardon me if I question before I leap.  Is there a manufacturer of such products that you prefer?  I am trying to stretch mentally, but I am also aware of the old adage that if it sounds too good to be true, it usually is. 
millercarbon - Same question on the Blue Quantum fuses -   independent source that explains why product actually does improve sound  Before I go through the process of reading manuals to identify proper fuse types, ordering the necessary fuses and then opening up relevant pieces of equipment to install them, I'd like to understand how they work. Also would like your feedback on how they behave in an environment with power spikes so significant that my Niagara power conditioner will turn off the system.  (We have a lot of nearby lightning strikes and also have an excessive number of virtually daily very short outages followed by peaks when service is restored, since we are at the end of the power company's service area and are served by only one circuit.  Thank you.
@sameyers1 I encourage you to read Howard Kneller over at SoundStageUltra. He has detailed and explanatory write-ups as well as deep depth of experience with SR products. On this forum, in addition to @millercarbon who has already posted, @folkfreak and @davidpritchard come to mind (among others).
sanmeyers1 has some perfectly normal and common concerns, all too common in fact and still held by a lot of people with more than enough experience to know better by now!

millercarbon - Same question on the Blue Quantum fuses -   independent source that explains why product actually does improve sound

When you find that independent source do me a solid and let me know. In all my years studying high end audio, watches, cars, wine, and well pretty much everything, I have yet to find any. In fact the only one I can think of, Consumer Reports, when you actually happen to know a lot about the product you realize not only do you know more than CR, they are more often than not flat out wrong. Which is not to pick on CR but to show how thinking you can rely on anyone else is a fool's errand. You, and your ears, and your brain are the closest to an independent source you are ever gonna find. OR again, let me know!

Before I go through the process of reading manuals to identify proper fuse types, ordering the necessary fuses and then opening up relevant pieces of equipment to install them, I'd like to understand how they work.

Most components have the fuse readily accessible from the outside, often times even with the value marked right on the receptacle. Nowadays nobody needs a manual. The info is right there on-line.

A lot of us would like to understand how they work. And this runs counter to the conventional wisdom, but too bad its the truth: nobody understands how they work.

Not just fuses. All of it. You want proof? I got proof! Take a few things we know how they work: cars, airplanes. The principles are so well understood and so uniformly applied even people who don't understand the principles of aerodynamics can look at a try-plane and know its an anachronism, a jet and know its fast, a car and know from design alone its a sedan or a sports car. Contrast that with cables. If we know so much about why cables work then why are there flat ones, big fat round ones, skinny little round ones, ones that are passive and ones that are actively shielded? Or take amps. Audiophiles can't even agree on tubes vs solid state. If we know why then surely we would know a planar is better than a ribbon. 

Hey look, I get it. Everybody wants to believe. Well wish in one hand and hope in the other, etc. No. Not buying it. Best you can do, try and find designers with a long track record of making products you think sound good. Not anyone else. You. The independent source.

Also would like your feedback on how they behave in an environment with power spikes so significant that my Niagara power conditioner will turn off the system.  (We have a lot of nearby lightning strikes and also have an excessive number of virtually daily very short outages followed by peaks when service is restored, since we are at the end of the power company's service area and are served by only one circuit. 

This is another common misconception. Real common. Don't know why, except that hardly anyone understands even basic electronics. But the way a fuse works, too much current flow heats the wire enough to burn out breaking the circuit and stopping the flow of electricity. So there has to first be a circuit and a flow. Understand? Power spikes don't burn fuses, current draw burns fuses. Component turned off, no circuit, no fuse burn no matter how much spike. Component draws too much current, fuse burns out, spike or no spike. Component doesn't draw too much current, does not matter what voltage does.

Your Niagara conditioner is a whole different story. It is not a fuse. As you said it turns off the system. Whole different thing.

The very few really good designers, of which Ted Denney is definitely one, they probably have a pretty good idea what is going on. You can come up with one great idea and be random. You come up with a whole string and at some point you have to give the guy a little more credit. Ted has invented freaking PAINT that works acoustically. That is just over the top brilliant. 

Yet every time Ted does try and say a little the most common reaction is he's blowing New-Age smoke and/or snake oil and mirrors. Whatever. Does not matter to me. I'm the guy who knows nothing matters less than WHY. Only thing that matters is how it sounds. I leave it to others to explain why. 50 years of doing this has taught me nobody knows why. Heck hardly anyone even can hear a lot of this stuff. Not because its not there. Because they can't hear! Correction: they haven't learned how to listen! 

So for example Ted has mentioned somewhere, not sure if its on his site, that ECT, PHT, HFT, etc use dither. In general, dither is a randomized addition to a signal that for some reason having to do with us being humans creates a perception of higher resolution. Dither is totally used in video. They are very scientific about it, with dither tailored to each application. Well, the HFT, etc are basically the same thing with slight differences. Yet Ted says dither, people brush him off. I actually wrote a post about this when I reviewed these. As I recall nobody was interested and instead I was ridiculed. Its okay. I give as good as I get- and then some.

I keep coming back to Synergistic because in all that time I've seen nobody and nothing establish as good a track record for performance and value. Nobody in the industry has as good a buy-back program. Nearly everything they sell comes with a 30 day no-questions asked return guarantee. They stand behind their products so solid they even replaced a Blue Quantum Fuse that burned out on me!

If you ordered HFT you will know soon enough. My advice, don't just plaster them all up according to the diagrams. Start with just one. If your ears are any good you will hear and be surprised by what just one can do. Then before putting another one up move the first one. If you've got the chops you will notice the sound change from moving one even an inch or two. Its crazy but you will be able to tune the sound of things like cymbals. Not by a huge amount. But enough to notice. Enough to prefer one over the other. Only then when you are happy with that one move on to adding the next one or two. If you ordered the HFT Speaker Kit do the same with those. Only do them in pairs. But experiment with each one individually before adding more. Then when you have them all up go back and tweak again just to be sure.

Op here is our take on what direction you should take

Personally we would recommend that you try a high end ref integrated.

We know you tried a Luxman and it clipped there are better sounding and much more powerful integrated amplifiers.

Before clipping did you experience greater resolution?

A T+A  3100 hv is a 300 watt 8 ohm 500 watt 4 ohm integrated based on $40k seperates you would gain transparency with an improved sound stage. 

The Gryphon Diablo is another massively powerful unit. 

Both of these ref grade int will dramatically outperform your Ayre Proceed combo.

Next upgrade your old Aeriels with a modern set of speakers.

Then upgrade digital.

Then cables.

Dave and Troy
Audio Doctor NJ

@audiotroy the Luxman was a bit brighter sounding than my gear at lower listening levels, but not necessarily better.  Its bass response was inferior.  Overall resolution may have been a bit better on the high frequencies.  It was not tiring or electronic sounding.  (I owned an excellent Luxman receiver many years ago, and the Luxman was paired with Magico A3 speakers at a show we attended - a very good pairing.)

The Gryphon Diablo has been suggested by a local dealer.  But why purchase a new integrated before speakers?  

If new speakers require less power, wouldn't it make sense to start there?  Frankly, after auditioning Magico A3, B&W Diamond series, Wilson and others, I am less convinced that newer speakers will sound better, just different in some instances.  The Magico was the best in our view. A bit more accurate than our speakers, but with a bit less realistic bass response, particularly when listening to say a jazz piano trio and its acoustic bass, and a bit sterile sounding. After 30 minutes of listening, the B&W 800 and 801 were tiring (too bright and electronic sounding).  The Wilson Sophia and Sasha auditioned a number of years ago were similar to our Aerials and I didn't see any improvement in imaging or resolution even though that was suggested as their strong points.  What would you recommend for someone who prefers speakers that lack a lot of coloration, have great resolution, don't sound electronic and tiring, and have good full-range frequency response?

Thanks in advance for your input.  
1) Upgrade source, Qobuz 96/24 is the start point, or SACD

1) Upgrade speakers will give you the best SQ improvement. Newer speaker not necessary better. You will find many decent used speakers on used market. That also include speaker placement, room treatment, seat position.
2) Upgrade amp accordingly with your speaker need,
3) Improve DAC and pre-amp

4) cable
@sameyers1 - I think a NAS’s powers supply is no better or worse than a Mac mini’s.

I got the L1 cheap because the seller thought it was fried.  The drive needed to be formatted.  I removed the 2TB drive from the L1 and replaced it with a 5TB drive which is currently the largest 2.5inch HDD you can buy.  The 2TB drive works too.

I don't notice any difference streaming from it or the NAS, but I also haven’t compared them in any kind of listening test.  The power supply is much more robust in the L1 then the Synology NAS, and the L1 doesn’t function like a normal NAS as their is no file management when on the network.  

To add music to the L1 you have to disconnect it from the network and connect it to your computer with a USB 3 cable (regular USB cable works too, just slower).  Lumin believes the L1 is superior to a NAS due to its power supply and stripped down NAS software.  

FYI, I use my Synology NAS for files other than music as it has (2) 10 TB HDDs.  Also, I have more than 5TB of music files so I find myself using the Synology NAS.  I recently purchased a lifetime license to Roon, however Roon doesn’t recognize the L1 as a storage device as it can’t be mapped like a traditional NAS.

I would suggest evaluating speakers, i.e. Maggies as well as room treatments.  The best bang for the buck is often the least expensive. 

I recommend listening to Magnepans due to your choice of music.  We all have our favorites, but listening costs nothing and it may be eye opening from box speakers.
OP after looking at your system one of the bottle necks is your interconnects and speaker cables.

Transparent cables are actually not that transparent, and we are willing to believe that if you dd your last source demo with new non network interconnects you would have seen way more improvement.

Please try to borrow a set of Wireworld Gold or Platinum inteconnects and then change out your digital or try new electronics.

The reality is that if you just relistened to your system with new interconnects from the amp to the preamp and from your dac to the preamp you would be shocked at the improvement you would have heard with upgrading your digital.

Changing speakers to newer one and then changing the amp is a viable solution

Look at the Kef Reference line remarkable blend of detail, huge soundstage and a natural midrange.

The new Vimbergs were awesome, we don’t know if they would be in yoru price range.

Dave and Troy
Audio Doctor NJ

@audiotroy thanks for the input.  You are the second source to mention the Wireworld cables.  Will consider borrowing from The Cable Company to check them out.  Also, I am not surprised you recommended KEF Reference speakers.  I like the "British" sound.   And we purchased KEF speakers years ago for our daughter and my parents after auditioning a number of bookshelf models.  I am not familiar with Vimberg, but will research cost and see if there are any dealers not too far away.  

Thanks again for your assistance. 
@sameyers, you haven’t mentioned what seismic isolation, if any, you use. This is a very important area and if addressed can bring hugely better sound. Suggest looking at Ingress Engineering, Symposium, Townsend.
If you decide on Townshend Seismic isolation please contact me for discounted prices.
Gee, I never would have guessed. That certainly explains all the enthusiastic posts. 🙄
@geoffkait yes I realize some posts are by those hawking products they sell.  It's their right. Rest easy, I never purchase anything without demoing in my home.  And I tend to shy away from the more esoteric items.  It is interesting to me how few posts actually address the issue on which I focussed, the digital source.  

Source, amp, speaker.  Aren't those the three basics, perhaps adding room set-up/treatment?  Then on to things like power and cables. Perhaps I should have made the title of the post something like Music Server vs. New DAC, which offers most improvement?  I am open to more unusual tweaks if sellers offer in-home trials with fair return policies.
Source, amp, speaker.  Aren't those the three basics, perhaps adding room set-up/treatment?  Then on to things like power and cables.

That's what a lot of people think. Actually though when you get around to some of the better cables its hard not to notice they can make at least as much improvement as anything else.

The Element CTS speaker cables I just got for example were about as big an improvement compared to my earlier/older/cheaper Synergistic cables as my Herron phono stage was compared to my earlier ARC PH3-SE. And for less money.

Which is why when you ask what should my next system upgrade be and mention value as a priority then it would be a kind of dereliction of duty to let a guy throw away five grand on a server. You could literally put half the five grand into things like fuses and HFT, the other half into wire, and be far, far beyond anything you could touch with any amount thrown away on a DAC.

Plus, I went back and read the OP again and you mention your wife. There is a hardness, grain and glare to digital (and a lot of SS too) that is very difficult to eliminate. Seems inherent. Women seem especially sensitive. It bothers them. A lot of guys misinterpret these as detail. A LOT of them! Women on the other hand almost never say what it is, they just notice some music is more pleasurable. Well, guess what? The music they find pleasurable always has less hardness, grain and glare. So you get really good cables like Synergistic, they say things like, "Wow! I could listen to this all night!" Which one audiophiles stunned wife actually said to me.

That guy, he had bought all the best most highly reviewed crazy expensive gear you could name. But it was one of the worst sounding systems I ever heard in my life. The one big mistake he made was buying based on reputation instead of audition. The way you're doing it is harder and takes longer, but by auditioning you actually learn what really does sound good, and not just what other people think sounds good.
Totally agree with @millercarbon ! Everything he said on the impact of cables in the system. I also second the Synergistic Research stuff. It works!
To those who have been kind enough to respond to my post, I want to provide an update. I have followed the suggestion of @millercarbon and contacted Synergistic Research regarding their room treatments and other products. They put me in touch with Peter Hansen of The Cable Company, one of their dealers and a former Synergistic employee. Peter asked for a list of my equipment, and I sent an excerpt from my original post along with some photos of my listening room.

We spoke by phone today and the first thing he wants me to do is to try two alternate speaker locations and to swap my right and left speakers so the side-firing woofers point to the center of the listening room rather than the sides. The alternate speaker locations were recommended to get more air around the speakers. Interestingly, he was not at all concerned about increasing the distance between the speakers beyond the typically recommended norm given the distance to my listening position. He said that the HFTs will resolve any imaging issues once I’ve optimized the speaker locations as best I can. 

I’m to call him back after several days of listening to the speakers in their new location. He will then work with me on the placement of the first set of 5 HFTs. Will post in a couple of weeks after testing the first HFTs, which can be returned in 30 days for a full refund if I’m not satisfied.

Hansen was very pleasant and helpful and given his reputation I have expectations of much improved sound as I work through the process of installing the room treatments he is recommending. He suggested adding Synergistic’s Black Box to manage the lower frequencies once I’ve installed the optimal number and type of HFTs for my room and on my speakers. 

Stay tuned if you have an interest in acoustical treatments, and thanks again for your suggestions. 

Speaking of speaker placement, as it turns out most speakers are placed too far apart. It seems that audiophiles believe that a wider soundstage will result if speakers are placed far apart. However, the best, most accurate soundstage and sound generally results when speakers are located at their optimum locations, which almost always is closer than one imagines. But by starting out with speakers far apart one can perhaps never find the ideal locations. A good starting distance is 4 feet. Then, listen carefully and move the speakers incrementally apart until the soundstage snaps into place, as it were. Obviously a lot depends on the room, room treatment and the particular radiation pattern of the given speakers. The out of phase track on TEST CD or TEST LP helps enormously with speaker location. There is only one optimum set of locations for speakers in a given room. Trying to find optimum speaker locations by ear, without a method, is like trying to solve a set of x simultaneous equations in x+n unknowns. As Bob Dylan says after every song, good luck to everyone.
@keithtexas It's the room, not the speakers.  If you saw the photos I sent to Hansen you would understand.  Goal is to pull the speakers further forward into the room and away from a wall that intrudes 30" into the room at its center.  This wall forms the enclosure for a bookcase (above) and a fireplace and space for the 58" tv below.

@geoffkait Normally I would agree with you. The ratio of distance from listening position to speakers vs. distance between the speakers is currently 1.36, within the 1.2 to 1.5 normally recommended.  And voicing the speakers with a test CD plus more importantly using my own ears is how the speakers got to where they are now.  My room is a far from an ideal listening room - in addition to the issue explained above, it is open in back to the kitchen and a breakfast nook and there are limits to where I can place speakers given that it is the family room, has the tv slightly to the left of center and is not a dedicated listening room.  If the HFTs work, it would be great.  There is a 30-day free trial, so if I am not satisfied, I can return them.
So how did it go @sameyers1 ?
@thyname, step one of relocating the speakers involved moving them further into the room to get more air around them.  This  noticeably improved the imaging and clarity, but narrowed the sound stage a bit, which surprised me, as they are the same distance from the side walls.  

The next step will be moving the speakers further apart and a bit closer to the side walls while also  swapping the left and right speakers so the side firing woofers face the center of the room.  Will get to that next week, as we want to spend sufficient time with the speakers where they are to make sure we get a good sense of the sound at this location.  Will advise once the next change is made.  (Moving each of the 120 lb speakers about 15' does not make for quick and easy A/B tests.)  After that I will call back Peter Hansen and report the results, as he wanted to know the results of the speaker relocation and may have suggestions for further tweaking of the placement.  Once we get that optimal, we will do the phase 1 HFT install.  He didn't want to add any HFTs or other room treatments until we found what we believed was the best speaker placement. 
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