DAC for entry level system

Honestly, if all you're trying to do is do better than the DAC in the Touch, that isn't going to be very hard to do. As I mentioned, I'm running a very modest XDA-1 DAC and it is a clear improvement over the internal DAC of the Touch.

There are lots of DACs out there and many of them sound good, albeit different.

What I'd do is pick up a used PS Audio DL III. It's a nice DAC and goes for around $400, used.

I'd also like to make a comment about equipment with tubes. If you decide to go with tubes, be prepared because it is a bottomless pitt. I'm just dipping my toes in the tube pool and am finding that good tubes start at about $100 a pair and go UP from there.

Thansk you all for the responds.
Tonyangel, I was just talking to a friend and he also sugested the PS audio DL III. Since it was originally relesed few years ago, do you still think that it's a good DAC compare to relativelly new units like Musical Fidelity M1-DAC that was sold here for $525?
Darkstar1, Good Idea to try the Z DAC at home. I'll read more about the unit. I'm planning to go this weekend to the T.H.E show in Newport, and I just saw that Parasound will demonstrate there Z line componants. It will be intersting to hear it.
Since I have solid state amplification, I also thought that a tube based DAC might be good idea. I never had tube equipment before, and I hope I'll be able to try it. I saw that the MDBT Havan was sold used for around $700, then I think it's above my budget.

the better dac,the better sound you will get,even entry level systems benefit from quality dac

Bedel,

I can't comment about Musical Fidelity gear, except to say that I've found that it sounds kind of thin in my system. Lots of guys like them, though.

Look, I've found that once you get into a price point, most things are going to be equally good, but in different ways. I really don't believe that there's any such thing as something that just blows everything away. If there was, everyone would have one.

There is such a thing as system synergy. That point where everything in your system comes together and gives you that satisfied feeling. You just have to hunt for it. I haven't been into this for very long, but my limited experience has been that I've come across very few components that I absolutely hated. Choices were just based on what I liked more.

As for the DL III, I only mentioned it because the tech isn't that old and it's a good sounding DAC that you can make a pretty good deal on. Look up the specs and see if there are any limitations that you just can't live with.

If you want to mess with tubes a bit, I just bought a tube buffer that I run in line between my DAC and pre. It does add a bit of flavor that I've found pleasant, for now. Some say that they don't do anything. I think they do. For me, it was just a way to try tubes without having to jump in the pool.

I have to append what I said above on the DLIII. After having posted what I did above, I started having second thoughts and went and checked the specs on the DLIII.

What I found (as opposed to what I remembered) is that the DL III can only handle a 16/44.1 incoming stream. It may be nice upgrade for a CD player, but not for a Squeezebox Touch, since the Touch can do 24/96 in stock form and 24/192 with a simple software mod.