To DAC or not to DAC


I have somewhat of a dilemma. I got an Amazon gift card for Christmas and had forgotten about it. I just ran across it and have to spend some money. I kind of got all up into doing the digital thing, starting off with a Sonos unit, but I think that I want to run down the road of some quality CD music.

I'm currently running an XDA-1 DAC. Right or wrong, I kind of view it as being a budget solution, but it's doing fine as the converter for my Sonos and Apple TV. My dilemma is whether I should get something along the lines of a decent CD player in the form of a Cambridge Audio 550C and either run that through my XDA-1 or get a better DAC. The second choice would be to get something like the 650C which has dual DACs and just run that straight through the analog outs.

I guess what I'm asking is, will I get better results with the 550C and an external dac or with getting the 650C using its internal DACs.

My next question is whether something like a DacMagic would be an upgrade from the XDA-1, if I go the route of the 550C and external dac. For that matter, would the internal dac of the 550C be better than either the XDA-1 or the DacMagic?

I'm just lost.

Thanks.
tonyangel
Well, I took the DacMagic that I borrowed back to the shop last night, and the guy was like, "so soon." I told him my experience and he didn't question it. He simply asked about what I was trying to do, and, of course, I told him that I wanted to make my system sound better.

He told me that, when upgrading, you should always do it from the perspective of attacking the weakest point in your system.

I told him what I had and what my listening habits were and he flat out told me that I'd get the biggest bang for the buck by getting a better preamp. He suggested an Audio Research LS-3. Once I do that, then I'll turn my attention to first my digital source and then the DAC.

He suggested that, with my budget in mind, the Aragon/Audio Research combo will take me a long way before either is the limiting factor in my system.

I hope he's right because all of the equipment swapping that I've done in the last few months is starting to be a PITA and I'd really like to get to a point where I'm listening to the music rather than the equipment.
Tonyangel, when Jt_to says, "Up-selling at its finest," he's implying that the guy at the shop's suggestion that you get a better preamp is an attempt to make money from you by upgrading to to one of his preamps. But, the Audio Research LS-3 the guy at the shop is suggesting, is an older preamp that can only be purchased used. Unless the shop has one, I would say the guy at the shop is simply trying to be helpful and not "up-sell" you.
I have an Audio Research LS-3 pre that I bougth about 17 years ago; it still works like new and I use it in my second system upstairs.

It is an execeptional unit and is one of Audio Research's best SS preamps ever offered. You cannot go wrong with it; it's a fine piece.