What DAC should I buy?

Theta DSPro Basic IIIa with HDCD option installed is generally available used in your price range. I have the regular version of same w/o HDCD (paid $700 used) and run it with the Monarchy DIP 24/96 to good effect, but I have not tried the newer "upsampling" converters such as the MSB in my system (nor, of course, do I own any HDCD's). The Theta is a well-known, well-made, and highly-rated current-production model from a leading digital manufacturer that lists for around $2,800 new, but that seems to have fallen from favor price-wise on the used market because it lacks the latest buzzwords and has been around for a while, making it something of a deal. I have wondered how my unit would stack up against some of the newer models available for around $1,000 used (MSB, Bel Canto, Musical Fidelity, Perpetual Tech, etc.) but haven't been at all displeased with the sound I'm getting (with a Theta Pearl transport), so I've lacked motivation to check this question out for myself. Good luck with the search.

I second the Theta Pro Basic IIIa. Thats what i use!

I am curious about Music Fidelity's new DAC also. Seems to have everything I want and then some, but its too new to get any end user feedback...if some one owns one, please let us know what ya think.

I'm floored, pleased , elated, happy...
I've a MSB Gold Link III being feed by a AH! Noej Toebs 4000.
I just added a Perpetual Technologies P*1A Digital Correction Engine. The purchase of the Correction Engine is by far and away the best money I've ever spent to improve the sound of my digital system.
I'd love to wax all kinds of poetic mumble jumbo and expound on the units virtues but it really is something you'll need to personally hear to believe.
With the addition of the P*1A this might be as undigital sounding solid state setup as I've heard.
(No preamp just a Channel Island volume control. SS amp)
disclaimer: I am in no way shape or form affliated with the company or anyone who even sells them.
Just some guy with a stereo in his living room.
www.perpetualtechnologies.com

The best DAC in the price/performance parameter that I have heard is the Bel Canto DAC2. It is really amazing sonically. It is also quite inexpensive and comes in a very small package.

I personally use the Audio Aero Capitole 24/192 MkI and love it. If I bought a second system, I would probably use the Bel Canto DAC2.

Hope this helps