Except the XDS1 is a DSD DAC and there is no proper way to do digital volume control in DSD space.
I think I've invariably found that adding a preamp to the system can provide improvements - it doesn't have to be solid state. I've heard the Ayre KX-R before on a similar system to mine and the improvements in soundstage are also apparent.
Whether you go the ARC route or the Ayre route really depends on what you want to sacrifice. The Ayre provides that last smidgen of detail and dynamics but loses out in terms of sound stage depth and height plus that bit of midrange lushness.
I think I've invariably found that adding a preamp to the system can provide improvements - it doesn't have to be solid state. I've heard the Ayre KX-R before on a similar system to mine and the improvements in soundstage are also apparent.
Whether you go the ARC route or the Ayre route really depends on what you want to sacrifice. The Ayre provides that last smidgen of detail and dynamics but loses out in terms of sound stage depth and height plus that bit of midrange lushness.