PS Audio DirectStream DAC or Aqua Formula xHD

I'm afraid I can't say anything about The Aqua Formula but I certainly will readily recomend the PS Audio as my friend has one and it is a pure delight to listen to. As you probably know it upsamples everything to DSD 20x and all I can say is that when you listen it is probably the closest sound to analogue that comes from a digital file. I don't think it will be surpassed for a long time. Good luck in your choice.

I am not familiar with the Aqua DAC, but have enjoyed my PS Audio DirectStream DAC, purchasing mine just after it was released.

One thing I very much enjoy about the DAC is that, because it's designed around an FPGA and not an "off the shelf" DAC chipset, PS Audio has released a number of firmware updates (which are very easy to apply), and every single one of them has improved the sound quality...like getting a "new" DAC once or twice a year.

I also find the support at PS Audio to be excellent.

The Directstream Dac in my system was no better than my current Fostex HP-A8C.  The only real difference was that it’s presentation was slightly more rear-hall.  Great if that’s your taste but less presence and immediacy in vocals.  The noise floor seemed higher in the Directstream as well.  I could hear more ambience with the Fostex.  The Directstream was a touch softer and more rounded, but I can’t call that an improvement because it’s taste dependent.

The Aqua was just reviewed slightly poorly in Stereophile.  If you haven’t heard an R2R and NOS Dac before, be sure to audition.  Their sound isn’t for everyone (one man’s “dull” is another man’s “natural”). I believe the balanced outputs were riddled with distortion due to poor design.