What do I need to set up digital music server?

What you are after in "c" is not entirely clear, possibly because of how you have worded "c". I hope the following will help your understanding related to "c":

99% of the time CDs are "ripped" (thereby producing digital audio files from the tracks on the CD) by using the CD drive in a computer in conjunction with software, such as dBpoweramp, that's installed on that computer. It's only in the last few years that some hardware devices geared to audiophiles have come on the market which, while not being computers per se, do incorporate the ability to "rip" digital audio files from audio CDs, store and organize those files, and also play back the files. Naim Audio offers an entire product line of such devices. Their website is informative.

However, I suspect that all the Naim devices, as well as all the other comparable devices that are now on the market from other companies, are priced above $1,500. To stay in your price range, I doubt you'll get all the features you want in a single device -- but you can get close.

Sony is just bringing to market this month two devices (HAP-S1/B priced at $1,000 and HAP-Z1ES priced at $2,000) that look quite interesting. Other than the CD ripping part, I think they do pretty much everything else that you are looking for. The Oppo 105 at $1,200 is another excellent option in your price range provided you have a computer to do the CD ripping part and can store your resultant digital audio files either on that computer or on an external USB harddrive.

My system consists of MacMini with external 1TB drive, Apple Express (Wi-Fi receiver on my network), Benchmark DAC1 (D/A converter with volume control) and power amp. I rip CDs, using free "MAX", to ALAC format (Apple Lossless Audio Codec). I use Itunes to organize and play albums. As long as you send all the bits ("bit perfect") nothing on this side (computer, software etc.) makes any difference. Music data is sent in packets to wireless receiver (Airport Express) that recreates timing producing S/Pdif stream going into DAC. Up to this point music was just data thus had no timing but now it becomes digital music stream in S/Pdif format. It is important that bits in this stream are recognized in D/A converter in exact time intervals. Any uncertainty in time converts to noise on the analog side. It is called Jitter. Jitter at this point is the only thing that can affect sound. After conversion you get analog outputs of your DAC and connect to amplifier.

Reducing time jitter of the S/Pdif stream is the most important thing. You can achieve it by using good wireless receiver (Airport Express is not horrible but it is not great either), reclocker or jitter suppressing DAC (like my Benchmark DAC1). Reclocker, that you can install later, will give you better jitter suppression than DAC and will make you more flexible with your choice of DACs. Think of reclocker as buffer that corrects moments of transistions.

I don't use reclocker, happy with suppression of my Benchmark DAC1, but you can find few of them on the market. One of them is manufactured by Empirical Audio. Steve Nugend of Empirical Audio is very knowledgeable and active on this forum.

In spite of bits coming to DAC in exactly same intervals (no jitter) DAC itself might create jitter when noise is present since transtions from one level to another take time (uncertian threshold). Because of that you should use power supply filters and good shielding on the cables. My DAC has 3 switchable digital inputs. I have my CDP and TV connected to two others.

Thanks for your responses. In "C" I was trying to say, I want to be able to transfer my CD collection over to digital files.

As I explore more about this I can see that there are a number of different approaches taken by different manufacturers. Some products are all in one with storage, DAC, CD drive, digital music player and software in one unit. On the other hand there are many products that do only one or two of those functions.

So,,,If I have an external DAC and and external storage device then all I would need is the digital music player with a remote or use an Ipad. Then I could "rip" music from my CDs using my lap top. Am I getting closer here?