Where to go next, DAC or Preamp

I'm looking to make the next upgrade in my system and am looking for some advice on where to go next.  Here's my rig, which is used for both 2 channel and HT:

Emotiva XMC-1 Processor
Emotiva XPR-2 Amp for FL/FR (600 watts x 2 @ 8 Ohms)
Emotiva XPR-5 Amp for Center and 4 surrounds (400 watts x 5 @ 8 Ohms)
Focal Electra 1028 BE II Fronts
Focal Chorus CC 700 Center
Polk surrounds
JL F113 sub
Bluesound Node 2

I'm looking to make the upgrade to help with my 2/2.1 channel experience.  Today, that's all done thru the Node 2 via digital coax to the XMC-1 processor.  On the XMC-1, I flip back and forth between Reference Stereo mode, which is pure 2 channel without any altering of the signal, and 2.1 using Dirac room correction with my JL sub included.  I use the DAC in the XMC-1 (Burr-Brown DSD1796) as opposed to the DAC in the Bluesound Node 2 (Burr-Brown PCM5122). 

I think I'm down to either a dedicated DAC or a Preamp, and that's what I'm looking for some help with.  My budget ceiling is $2500.  Would prefer new for warranty purposes but am not opposed to used.

If I go DAC, I'm looking at the Mytek Brooklyn Dac + or the Schitt Yggy.

If I go Preamp, I'm looking at the Primaluna Prologue Premium.

Looking for opinions on what is going to be the better upgrade, the DAC or Preamp.  And if you have other suggestions for either option you'd recommend other than the pieces I've listed above.  

Thanks in advance for your opinions
I’ll vote for a DAC upgrade before a preamp..

Thought about buying a DAC which can be a preamp too?

Maybe wait a bit and look for a pre-owned Manhattan 2, Berkely, Ayre, etc., depending on tastes and system synergy of course.

I’ve come to the conclusion if or when I’m looking to upgrade anything, I gotta look at what’s up with those used pieces that are inside the proposed budgetary constraints.

The Exogal Comet could be a interesting prospect, thogh I’m unaware of the exact output IMP or the input IMP of your amp. If there is a 10.1 or better ratio there you should be golden.

I’d say lean on the DAC first notion. The bigger boost to fidelity will arrive there. Or, at least it ought to come from a solid DAC upgrade.

Once more, as decent as is your notion of a PL preamp, do check out the used preamps you can get for your current funding. I like the idea of a preamp in the mix, IF it’s a very nice preamp. There is where I’m prone to infuse tubes into the array. This is true especially if the amp is an SS amp. Obviously as well, if there will be more than one source to control having a very nice sounding tube preamp will help or at least influence, all the sources sonics and the overall presentation.

Go vinyl, it will cure your digi upgrade desire.  It did for me.  Just a thought.  Even entry level turntables have come a long way in terms of SQ.  Especially considering what really good digi costs.
Not looking to make a jump to vinyl. Thanks though.
Source first. Brooklyn DAC, but only if you already have proper power ring in your home, proper AC management and proper support for the existing gear, IMHO.
Either one; if your goal is over time to upgrade the entire system both are likely fine upgrades and the overall character of the rig will change again as you add the second upgrade. No one can tell you which would be preferable to your ears as a first move. Likely, you will make the upgrade, then become convinced you have really reached the ultimate. No, not even close. There are endless steps to climb. Trust me on that.  :) 
Forgot to put the audio gear is running on a dedicated 20 amp circuit.  And I'm using the Furman Elite 20 PFI line conditioner.
How about Gumby then buy the schiit preamp? for maybe 2k , you have both, you change your mine later, you won’t loose a lot when you sell them...

I would not upgrade either before improving your sources. For HT, I would get a IFI SPDIF iPurifier to improve the jitter for movies from your Smart TV and Blu-Ray player. This will reduce jitter for Dolby Digital and DTS sound tracks. You will be amazed at how good movies sound with this.

Then, for 2-channel, I highly recommend the Synchro-Mesh reclocker and a Reference BNC cable between the Bluesound and your Processor. This will reduce jitter significantly, to 18psec.

Both of these upgrades cost significantly less than a new DAC or preamp.

Steve N.

Empirical Audio

No offense meant but I would look towards replacing the Emotiva gear, one at a time.
No offense taken Stereo5.  That's on my long term list.  It's just hard to beat the price to performance that they offer.  I've had my fair share of issues with their gear, though, and will look to move on once the warranty is up.  Maybe ATI amps.  Possibly Pass Labs.  
I said that because I had their Dac 1 from about 6 years ago.  It was extremely bright sounding.
There are endless steps to climb.

: )

+1 @douglas_schroeder 
Preamp makes a much bigger difference than DAC in my experience.
@limniscate  Can you be more specific on what those differences are and how it makes "a much bigger difference?"  Thank you.
The new iFi Pro iDSD might kill all birds with one stone. USB and SPDIF DAC-preamp with lots of decrappifiers built-in.

That thing does look interesting. I’ll be sure to look for it at Axpona. 

My limited experience with a Mytek Manhattan indicates an extremely well designed unit with truly great sound. The feature set is excellent to include a well conceived analog volume control. My friend who owns both finds any sonic benefit to the Manhattan 2 to be slight.
If you’re looking at getting better 2.1 sound, get a used Primaluna Dialogue Premium integrated. 
I have the smaller brothers the Focal 1008be2’s and the Bluesound node 2. And the PM gives me a wonderful presentation. It also has a home theater bypass (so it works as just an amp) and sub out, so you can use it in conjunction with you current setup. 

Look for one used, I got mine for 2k.

I also have a Bifrost multibit, and though there is a difference between its output and the analogue out of the Bluesound, it’s not much. 
I had an Emotiva set up (amps only) and when I went to a tube integrated amp it blew the Emotiva away.  

Good luck.
In my view there`s no point to start the upgrade from the DAC if preamp is a bottleneck. I suggest to start from preamp then amp and lastly DAC. Focals are extremely revealing so they like top quality gear upwards.