would I be better off...

Thank you so much for your input. I had no idea that the design of the Yamaha was that good for its low price. I thought maybe I need something that was 4ohm capable and had more power to get better sound quality. Sounds like I may have to spend twice as much to improve on the yamaha. If I did that, I could look at things like Anthem 225, creek evolution 50a, or exposure 2010s2, etc. I guess I should get an external dac first, and worry about upgrading the integrated later. The iPhone dock of the yamaha has no appeal to me. My music is on an external hard drive of my laptop, and my phone is android. Thanks again for your detailed response I am very appreciative.

The under-$400 DACs currently listed on this site that I'd buy are:
Benchmark dac1
Micromega MyDAC
Paramount z dac
But if you buy a dac, you gotta buy cables...
and If you have a lot of high-res music, not all dacs can play all formats.
Planning on using usb? Mac or Pc?
4 ohm capability depends on your speakers.

I agree with Bomb. I would keep your amp and get an outboard DAC.
Please tell us more about your setup: computer, file types, playback software, speakers.

I'm still learning about all of it, and I'm sure I need a new laptop as my server. I have a decent amount of flac files and my mp3 are mostly 320kb. (Is that cd quality?) But honestly, I stream a lot of spotify for the convenience. My music is stored on a WD passport ultra 2tb external portable hard drive,(and backed up on a 1.5tb toshiba) and my computer is an old laptop used only for my stereo system, but it is an old slow PC Sony Vaio with windows XP. (I got it for free). Dvd/cd players were bought used. Lexicon rt10 and Technics 5 disc that both see no real use.
the lexicon is picky about even slightly scratched discs. Maybe the laser is going bad.They speakers will be upgraded soon. They are used Acoustic Energy Aegis 3 towers. My headphones are Phillips phidellio x1 and my software to play the digital files is?? (Windows media player is not really used). I use mostly Winamp? and VLC media player I believe. Help me please!!! Teach me. The salesmen at these stores just sell stuff, they don't seem to know squat about what PC to use or software of file types, etc. How do I learn? Thanks.

Realremo. You didn't list the PS digilink III. Are you not happy with yours or is it just outdated? I thought one of those was for sale on here as well.