Setting up a streamer for a frien

I had the Esoteric K05X and now have the K03XD.  Both models have three digital inputs at the back: RCA, USB and optical.  My streamer (Esoteric N03T) is connected by USB cable to the K03XD and sounds great.
It may be possible to find a $1,000 DAC that sounds better than the DAC in your friend's CD player, but I would be inclined to test that first.  Esoteric make pretty good DACs.

If you can feed the Node into the Esoteric it will sound pretty decent.  The most important determinant of of streaming sound is the DAC.  Transports matter, and a better transport will sound better (the rest of the friends system sounds like it is good enough to resolve smallish differences in components).
    As has been stated many times the Bluesound stuff occupies a certain sweet spot.  It is a great entry level piece, particularly if someone isn’t too certain that they are going to forgo a large CD collection in favor of streaming, or they just want to dip their toe in.  And it’s good enough, particularly if paired with a better DAC, to be an endpoint, and it is economical.  Certainly it can be bested, but its compatibility with every streaming service out there and it’s relatively good OS make it very attractive.

  A few more thoughts, RVW:
Did you recommend the Cambridge that we both own?  It isn’t much over the stated budget.  Also, where are the files to be stored?  Or is this listening only for streaming services and not going to include the present CD collection?

It’s very unlikely that my friend friend will store any files.  That’s why I recommended the Node.

If it truly is a K-07 then it has optical,coax and usb digital inputs and an AKM DAC. I can only imagine that the AKM implementation is worthy. Drop the $1.5K (implied budget) on the Bryston BD-2 and it should sound purdy dang good given the network infrastructure is up to par. Or as others have suggested do the Node, stash the saved cash and add to it over time and upgrade if the streaming turns into a crack pipe.