Ia a good amp more important than a good DAC?

Pubul - That was my point exactly.

Thomas - one thing I've found to make a huge difference is placement of the speakers in the room, even more so than putting acoustically absorbent materials around the room (although my room is fairly dead already).

While the garbage in-garbage out argument makes sense, I have a competent USB DAC that has outlasted 3 amp/pre combinations. In my experience the improvement offered by my current $12k amp/pre would not have been matched by replacing my $1k DAC paired with the old amp/pre combinations.

Thomastrouble, it was my experience too that room treatment is a significant upgrade; to the point that if you don't have that handled you never really hear how good your system can be; and as you likely heard, you don't have to strain to hear the improvements brought by good room treatment.

ThomasT, I agree with you 100%

1. Room
2. Speakers
3. Amp
4. DAC (even a cheap DAC has amazing specs)

Thanks for the continued input guys, this site is great and I am loving being able to gather all the good info, juggle it around and finally make decisions.

Yes, this room treatment thing has me wondering how many people out there that have good systems but are unfortunate enough not to be able to set up where they like at home. I have moved mine from a room with very low ceilings to a standard height room to one with very high vaulted ceilings and all left their own big mark on the sound. Unfortunately for me the one with the best acoustics (standard 8' ceilings) isn't going to work because of human traffic, but it created a feeling of "big" sound compared to the larger room with 16' ceilings where the system finally ended up. It just shows though that a while back I read a post from a guy using a similar set-up as me and when he moved his into a room with high vaulted ceilings he said only then his speakers really came to life.
After comparing the two sources my mind is at rest that I don't need to go any further with that given the minute difference between the two, however, with speakers I will probably get curious, but for now I will just dial in what I have and start enjoying it.....and all the forum threads.
Thanks guys