I agree with Photon, bad digital has always been more about "bad" analog than "bad" digital. Reference digital gear of ten years ago always has fantastic analog output stages just like reference digital gear today. look at all the "mods" floating around, 90% have to do with optimizing if not completely gutting the analog stages of CD players and dacs that are compromised in this area.
I think you would be wise to look at reference Levinson, Classe, etc... of days past. They can be had in your price range and still outperform current midrange dacs and in many ways compete with the best still today. My favorite bargian of this sort is the Resolution Audio Quantum, tough to find but a giant killer from ten years back. Owning a great dac today makes more sense than ever, just get a Hagusb converter and have PC or transport based refernce sound. Don't believe all the hype.