Your budget - $20K - best system for a small room

"Joel":

You could take my system (which retails for well under $10K) and change the speakers from the outstanding (but admittedly forward sounding) KEF Reference 102 Speaker System and get some outstanding refined small speakers like the ProAc Tablette 2000, Spendor S3/5 or Totem Model 1, add a sub like an REL Strata II or Strata III, and then go for a more expensive and more refined digital source like a used Sony SCD-777ES (this SACD player WILL DEFINITELY stretch my system's envelope to its upmost maximum capability). Then I would spend the rest on very nice vinyl setup (a Clearaudio Champion or VPI Aries Scout with a smooth sounding cartridge like a Dynavector that is plugged into something like an used AcousTech PH-1 or the newest version of the Monolithic PS-2 and its matching external power supply). As for the tuner, you can upgrade from a Magnum Dynalab FT-101 and go for something like a Magnum Dynalab Etude or try to hunt down a used McIntosh MR-78 or Yamaha T-2 (and in neither case, none of these tuners do not include remote controls, but these tuners are definitely worthy of your time and attention). I would personally keep my cables the way that they are (MITerminator 2 and 3 Interconnects and MITerminator 2 Speaker Cables), but if you want a smoother sound, then I would look toward Cardas.

Happy Listening and Good Luck!!!!!!!!

--Charles--

I second the vote for an LS35a speaker/tube system. Or a great amplifier though solid state was the Audio Research D 52 B I saw one on Audiogon for under $500. This makes a very musical system. You could pick up a ARC SP-6B or SP-8 and have a very musical system. When I sold the stuff this was a heck of a system that you could listen to for hours. One could add a SACD player or turntable to this system and come in lots less than what your budget is probably.
Good listening,
Steve

For musical, refined and smooth - you are probably looking at tubes (YES!!). Since your room is small, you can look at some lower powered more refined amplification.

Without knowing what gear you have previously owned or auditioned and loved, this is going to be tougher. Can you give us a hint what speakers in particular have done it for you? I am inclined to mention Kharma, Merlin, and Audio Note off hand. Each offers something that could fit your description with appropriate other components.

No matter what (given what you've said so far), I am going to recommend an Audio Note DAC - in my opinion, they are oh-so-musical, can be tailored by changing the 6dj8 equivalents, and are a good deal for the price (one.1x 2.1x or 1.1x) when bought used.

I will await further feedback before I would suggest particular amps, a cable match, and some tweaks (particularly room treatments which will be essential), though...

Hey - this is a fun question!

Hope that helps so far and looking forward to part 2.
Jacob

I'd spend the $20K on renting/purchasing a decent listening room.

Are you serious?

Thank you all for your great and helpful responses. Dekay, my listening room is a home office where I spend a fair amount of time. Wish I could make it larger, but not in the cards right now.

I will start researching some of the recommendations with an emphasis on good integrated tube amps.

Joel