Best Pre-amp for $500??

Digital inputs?  as in Optical?  USB?  Coax? So,  you are confirming the questions that you want an on board DAC?  I can understand that.  I would only comment that the quality level of a few of these preamps mentioned are far above anything that you will likely find at their price point with a built in DAC.  I could be wrong.... I can say that I've tried a few under $100 DACs and have been pleasantly surprised.  I'm sure that you could also get recommendations there.... On this tread and the last, Classe CP35 has been mentioned.  I have seen these on Craigslist (might have been a CP30) for as low as $300 and they do go regularly for under $500.  Not as detailed as some of the others, but smooth and musical....
Good luck with your search. 

Just did a quick search on Fleabay looking for a CP35 and came across this... I've owned 2 Yaqin products,  they were both quite good.  This looks to be a steal and later you can roll tubes.... I'll point you to a couple DAC's under $100 if interested. 
I hope this helps,  Tim
http://www.ebay.com/itm/YAQIN-845-12AX7-Class-A-Hi-End-Vacuum-Valve-Tube-Hi-end-Pre-Amplifier-110-24...

Some of the older home theater preamps sell within your budget. Some are well thought of regarding two channel listening, and once sold for several thousand new.

They are often sold due to no longer being up with the latest home theater technology. 

I enjoy one of these units in my bedroom system. 

Hope this helps

Currently available for sale on A'gon in the Preamplifier section:
Rotel Preamplifier Processor RS P1570 
Original price $2199.00 asking  $900.00

Happy hunting. 

N

DacMagic Plus by Cambridge Audio can be used as a preamp. However it does not include any analog inputs. Several digital inputs.  XLR and RCA analog outputs. Wolfson DAC Technology.  $399.00 music direct.

N