DV-09 DAC? Dennon integrated DAC? External DAC?

The DV-09 was great in its day. You really need to try both the blueray and the digital out to the denon against it. The 09 is probably 24/96 quality only. Due to the 09's age, I wouldn't spend much trying to upgrade its sound.

You really need to play all together first. If you are heading 2 channel, you may end up changing everything.

The sub is definitely undersized to handle the work for your system. Turn the volume on it down to reduce noise or just plug the port.

If you have $500 to spend or $5000, the best route is to listen to as much as possible first and see what you want most that you are missing. Then come back to the forum. However, since you are already set up for theater, why not keep it running but improve the amp and/or speakers. The denon should have preamp outputs?

i'd venture that your denon avr is the weak link--it's a modest piece which likely won't sound as good for 2ch. as stated above, the dv09 was a totl player in its day, with a high quality dac, and (if you don't need to play cdrs) should still sound good. for your $500 i'd opt for a nice integrated (e.g. cambridge, used arcam or rega). you don't need a lot of power with your klipsches. i don't think your denon has preouts, so adding a power amp isn't an option.

Thank you all so much for your feedback, I will try to reply to all without this being a jumbled mess... or missing anything.
I honestly doubt the speakers will be changing any time soon, (unless I find a deal that I cannot pass up) with the exception of the sub, which I have had torn apart and put back together numerous times, I had tried blocking the port, but being a low power 8" with the box size required for a ported enclosure it was awful, just muddy nothingness. I went back to open ports, added polyfill, and lowered the gain on it, fired the port at the corner of the room (port extension) and it helped tremendously but just about anything I can buy would be better, OR I may keep it alive and ditch the Polk sorry enclosure and build my own. I have a tremendous amount of experience with custom mobile audio box building, I'm 100% positive that I can do a better job than polk did (obviously polk had economy in mind) if I can get ahold of the specs for this old sub/ amp combo, even the enclosure is pretty solid its just a terrible port design, two small tubes, derived from one side of the driver, and the bevel transition is too sharp. That’s another project all together though.
Back to the Klipsch, they do more than I could ask of them as far as the floor standing towers go, I know that sounds ridiculous but I have listened extensively to Klipsch RF-62ii running on Marantz integrated amp and Bluray gear, and Bowers and Wilkins (DM603 I believe) running on Dennon integrated amp and I honestly don’t remember what was being used as a transport. Both owners are friends of mine, and while they were very good, I didn't want to jump up and go buy a set over mine. Don’t get me wrong, I am not opposed to a different set of speakers, But I have been quite impressed with these modest Klipsch towers, and I very much enjoy the horn loaded sound. I have demoed every speaker that the audio shop near me had to offer up to the price of the Klipsch rf-62ii reference which my friend purchased that day, of the lot, Klipsch was the hands down winner over the Definitive , Paradigm , Focal, and Bowers and Wilkins, of similar price. While the power handling and sensitivity are not as impressive as the reference, you can’t beat these things with a stick for the price. So all that rambling aside, Yes, better speakers will yield a better sound, but for now I will rock these, and that said maybe I should wait to move much farther until I can afford some Messiah-esque speakers.
As for the DV-09, it was really purchased for future use as a transport only, so what I am reading hear matches up with all other reviews on that unit, It is an outstanding transport, with lackluster DAC capabilities, (from what I am hearing) the on board Legato Link is worthless, but it remains to be heard by me. The unit’s incapability to play DC-R’s is a moot point to me. I will have to look into the BDP09, I hadn’t considered that, I’m a bit of a sucker for the nostalgic look and build quality of the dv-09. I had looked extensively into the PD-91 and PD-93, but they are not only hard to come by especially in good working order, but sell for a pretty penny considering their age.
The Dennon, I believe is a serious weak point, when really pumping, it has shut down on me numerous times. It is underpowered for the Klipsch, 75 watts RMS output to the Klipsch rated 100watt RMS. Now I am not one to just blare music, I am more for quality than quantity, but there is something to be said about the height of the solo in Stairway to heaven (and the like) that gets me every time. Haha moving on The Denon has no preamp outputs.
So, all things considered, I really need to get this rig back up and running, see where we stand between the digital and analog output of the DV-09 and possibly go for a higher end integrated amp with a reputable onboard DAC, We’ll just have to wait and see.
In other news, I have heard good things about the Theta Preamp/DAC’s and it seems that you can come across some decently priced $500 or so second hand Casablanca i and ii, and Casa Nova units, which are expandable. What is your opinion on these? But I like the idea of USB compatibility as well... that’s where the newer Audio Engine, Cambridge, and similar come in. (any opinions on the Cambridge DAC Magic units?)
Also, I will have to look into the above mentioned Cambridge, Arcam and Rega integrated amps.
I am very open minded and considering all options at this point.
Again thank you all for your time and consideration. I welcome any and all additional feedback, opinions, call me an idiot... tell it like it is, haha like I said I’m open.

well...........................
The bottle of wine and ebay got me again. I shot a seller an offer i thought he would never go for on a Theta Casa Nova......... oops

he acdepted.

I guess I'm the proud new owner of a Theta Casa Nova. End DAC/Preamp discussion.

Amplifier suggestions anyone?

Welcome! Zimmy709.
Happy to have you on-board.