Best next step to upgrade sound?

The best bang for your buck is powercords. This is probably one of the most overlooked areas in terms of upgrades but will yield significant improvement in sound.

Thanks, all. So Blindjim, when you recommend an amp, do you mean add an external power amp via my AVR's preamp out? Do you think that would make a difference more than say, a dedicated CD only player?

yes... added to the pre outputs of the receiver.

Why?
I'd say given you have a mid level Marantz receiver. That means you have a mid level pre/proc and amp in there too.

For now... IMO... an amp will lend itself to better control of the loudspeakers, and greater fidelity overall, regardless the sources, and for BOTH HT & 2ch events.

Depending on how far up the food chain you go there, and if HT is going to be in house for a while, IF another amp is had later on, this initial one can do the rear ch duties... or as another systems amp... or to bi amp... it just seems to me a good way to start out from a receiver ONLY situation.

it should also help the Marantz by subtracting some of the power needs it currently has to endure.

Amps such as ATI, Odyssey, Parasound, Rotel, Anthem, etc, all have usually better power supplies and there's that 'singleness of purpose' too... dedicated.

Naturally, then it follows you'll need a pair of ICs, and later on a better power cord.

If the situation was that you had a nice integrated on hand, I'd say go get a real nice source first.

Eventually, you'll want to do that anyhow... if not already.

USBLUES is right too... room treatments will help if none are in place now, but it's not necessary to go whole hog and hang up a bunch of burlap covered fiberglass rectangles and squres all over the place... some plants in the corners behind the speakers and at the point of first reflection... after that, attending to the bass issues if you are bothered by them is likely in order. The EQ in the Marantz will help over come some of those bass issues for now.

Cabling can and should be done too... but again... I'd wait till I had some more upscale items to put 'em on.

Just my two cents worth as it's what I've done again, and again... and ....

have fun.

My recommendation is a tube dac and a mac (or a pc).

The best bang for your buck is powercords. This is probably one of the most overlooked areas in terms of upgrades but will yield significant improvement in sound.

Seriously? I'm guessing his current equipment has captured power cords.
Bob's suggestion for room treatments makes more sense to me. This is only true though if the wife approves.