Point of diminishing return for a DAC

Performance/dollar is, in general, a logarithmic curve, meaning doubling the cost is not going to double the performance. So there is an argument to be made that anything more than a $20 USB DAC is diminishing returns. 

But I think what the OP is asking is when the cost increase does not justify the performance gain. I think this is a highly individual decision. I agree with previous posters that the investment in the DAC should be balanced with the rest of the system. It's unlikely that a listener with $2500 speakers and $2500 preamp/amp is going to be able to appreciate the improvements provided by a $10,000 DAC. On the other hand, this may be well worth it for someone with a $30K+ system. 

If digital is the only source, it probably makes sense to invest a bit more in the DAC, but it's still got to be a balanced system to justify the investment. 

DAC technology is probably changing faster than other components, so unless the buyer is not worried about cost, I'd recommend being a bit more conservative with the DAC purchase.

For me, where digital is my only source, I don't think I'd spend more on my DAC+streamer than on my preamp+power amp or my speakers. 

I just believe that there is a threshold at around the $2500 price point. This includes:

1. Mytek Brooklyn +
2. Chord Hugo 2
3. benchmark DAC3
4.Schiit Yiggy
5. Sure, it can include your entry, too...;-)

After that, you need to spend more on all your other stuff commensurately to have a balanced system that can reveal the quality of a $5k+ DAC.

IF that is important to YOU, then go for it!!!

if you have other priorities for your hard earned money, then step off the gerbil wheel and  turn up the volume!! 

If you can find your ideal sound with an 800 dollar dac , then its pretty stupid to pay more . If you cannot get your system to sound right no matter how much you spend then its not the fault of the gear . There is an incredible amount of ocd and mind over matter stuff in this hobby , I am surprised google isn't targeting me with ads for mental health just for visiting. 

My advice is decide on a budget and find the DAC that sounds good to you in your system within your budget. The rest is an academic exercise. 

Yes ^^