advice needed to purchase first DAC

Musical Fidelity V-DAC, $299 from Audio Advisor and you can return if not satisfied. Blue Jeans cables have a good rep., there are many other good ones available used on Audiogon, try something cheaper to begin with. Try the lower end of a company with well respected products. I assume you are using a universal player as a transport.

USB DAC’s are all the rage. My recommendation is to go used and get more for your money. There are a lot of great DAC’s that are being sold simply because they don’t have the latest fashion in connection means.

I have the MHDT Havana and Paradisea +. I think they tend to sound a little better via the SPDIF inputs than the USB. I have a Bel Canto USB link in my system but I've heard the cheaper ones sound just as good. Another good sounding option as far as DACs go is the Cambridge DAC Magic. I would say it is more spectacular sounding than the MHDT stuff but overall not as natural. If you want a more robust sound at the expense of a natural tone then get the DAC Magic and I'd say you will be really happy. Plus it doesn't have a power cord to deal with like the MHDT stuff does and yes the power cord does change things with the MHDT DACs unfortunately so there you have an added expense.

I think the other posters recommend of the USB to SPDIF converter might be a good one that way you can judge for yourself on the merits of the various inputs. I don't think it makes a night and day difference and it's not like you have the most revealing top notch system so my thought it you will like any of these DACs. The differences are small between all of them so just buy one used and go from there. You really can't go wrong with a MHDT DAC. They could be used in a very hi end system and not be embarrassed.

I think your thought on upgrading the amp is going to get you the most improvement. Putting the extra money into the amp is going to do more than the DAC.