Bluesound installed DAC - music killer?

@asw  NAD, Bluesound, and PSB Speakers are all part of the Lenbrook Group head quartered in Pickering, Ontario, Canada.  The product you are thinking of is the NAD C658, which is a DAC, preamp, and network player, which among other things features Dirac Live room correction. 
Sort of like a Bluesound Node 2i on steroids; but unlike the Node 2i, without to my knowledge digital outputs.  I've read about it, but have no personal experience with it.  A couple years ago, I considered it, but settled on a Chord Qutest.  I've been a BluOS user since 2014, and have 4 pieces of Bluesound kit in the house.   

@asw The NAD C-658 is probably the BluOS streamer/pre-amp/DAC you're referring to. It is part of the "Classic" (C-***) series. It uses ESS-Sabre 32bit DAC and includes MM phono stage, DiracLive bass correction (and pay-upgrade to full-freq. version) and balanced outs. It earned top-honors by What-HiFi, Sound & Vision, etc. I don't have experience with this unit, but it is a compelling option.

I do have the C-388 digital integrated amp (with HDMI-2 and BluOS2i MDC modules), and am extremely fond of this all-in-one unit in my 2-ch system. I chose C-388 over the M32 because C-388 has Speaker A/B capability (M32 does not). I use this unit as a source to feed miniDSP4x10HD that functions as a crossover to drive LXmini speakers via 12-ch ATI (class AB) amp. Sometimes, I also listen to a set of Martin Logan electrostats directly from the C-388, normally I route ML's through the miniDSP also - since there are pleanty of amp channels, and it allows taming ML bass and extending the highs (by DSP) - makes them sound better to me. NAD C-388 uses the Burr-Brown PCM-1794(a?).

I recently tried something on the advice of Danny at GR Research (who said the poor-quality DACs in NAD and miniDSP were likely veiling the sound). I purchased two highly-rated (SINAD) Topping E30 DACs, and ran the digital signal (from optical source) direct to miniDSP nanoDIGI (which has 2 digital coax in, DSP processing, and 4 digital coax out) to the Topping DACs for full digital signal till DACs RCA-out to ATI amp. After a couple weeks of listening and playing with DAC filters, my conclusion was...

• It can be made to work - actually works great!
• It sounded different - and adjustable with DAC filters
• It doesn't sound better - to me in my room

Returned the Topping DACs (cost $5), and went back to built-in miniDSP4x10HD DACs. It was a worthwhile exercise and fun experiment - just didn't improve SQ.

@jazzman7 Just as you said, NAD C-658 does not have digital output. M50.2 is the only NAD unit that can feed coax digital to outboard DAC. None of the other NAD gear has the capability of sending BluOS stream (by MDC module or otherwise) to coax digital output. Even the M32, which does have digital coax output - will not output the BluOS stream to it's digital coax jack (yes it has coax output jack, and no it won't pass the BluOS stream - says so in the manual). This is extremely unfortunate that NAD built them like this, as it prevents using an upgraded DAC on all but the M50.2. Notice the new M10 and M33 integrateds don't even have digital coax outputs (older M32 has coax out, but it won't stream).
This small feature limitation caused me a lot of extra hassle, and it makes the Bluesound Node/2/2i the value option (even if you want all-in-one solution). Especially if, like me - you have speakers that require separate channels for each driver. BTW NAD M50.2 is very expensive relative to Node2i.  

Bluesounds have amazing quality for the price. You probably have a bad unit or weak cables.  I have been running a Bluesound Node 2i for a year with high End Nordst Cables. Last week I upgraded to a DirectStream with Kimber XLR > Schiit Freya+ > Parasound A23 Monoblock > Sonus Faber Sonetta VIII

So with the DAC and XLR cables a $6000 upgrade. Of course this is an improvement over the Node 2i but most people couldn’t justify the extra $6k bc the Node 2i sings so good. 

Ever since NAD started offering components featuring both BluOS and Dirac Live, I've been hoping for the Lenbrook folks to offer an upscale BluOS network player (preferably without a DAC) that was both Roon Ready and featured Dirac Live with either the NAD or BluOS label.
Like a Super Bluesound Node 2i with Dirac Live, with or without a DAC, but definitely with digital outputs.  In fact, I've been looking for anybody that offered such a player that featured Dirac Live that was also Roon Ready. I don't know of any at this time.