Integrated Amp Vs. Outboard DAC

Thanks everyone for the comments. I was thinking about getting the Cambridge Audio CXA60 as an integrated. It's available for about 800. I do think it has gotten good reviews for what it is. If I went for a separate DAC and amp it is going to cost me about $500 more. I really like the Creek Evolution 50A and the Musical Fidelity V90 DAC. I look at that as an investment in the future but I am trying to be practical. I will be working with CD quality files as opposed to anything hi-res. I live in a rural area so I will not have a chance to audition anything in person.  I'm moving on from an AVR with some Wharfedale 10.1s so anything is likely to be an improvement. 

I picked up a demo bel canto c5i here on agony for under $1000.    Very nice clean holographic sound and  does it all including phono and all the hifi many would ever need.  

I also believe an external DAC is the way to go. What digital source(s), other than the TV, will you use? This is important when considering your input need for the DAC. I believe there are several integrated amplifiers that will serve your 10.1s well and leave funds for a DAC with both  purchases keeping you within your ~$800 budget. If you are willing to buy used the AG marketplace is a good place to look. 

Hi Mesch, right now I am thinking about using an airport express with or without a reclocker as a source. Can anyone recommend a good amp with tone controls that would meet my budget? I do plan on buying the best speakers I can afford in the future. Anyone listen to something from Zu Audio?

I agree with jl35 for a midfi system in your budget an integrated with built in dac makes more sense. If your using AE as a source and cd quality files no need to chase flavor of the day dac technology. There are some decent sounding integrateds around your budget with both digital and analog inputs. If you want tone controls then consider a used NAD c375 bee with the on board dac module. It has plenty of analog inputs as well in case you decide to jump on the dac merry-go-round in the future. Otherwise look into offerings from Hegel or Peachtree Audio. The nova 220se would at the top of my list if I had your budget. It has been mentioned on here lately they are selling refurbs from the manufacturer at a nice discount and the reviews are very favorable.