Good cd player and a great DAC or great cd player?

The upgrade plan makes sense in principle: buy a player, then a DAC and a digital interconnect, then sell the player and get a good transport. Along the way you might try an aftermarket power cord.

But is this the best way? Reliable generalizations are impossible. It depends on the deal that comes up when you go shopping, it depends to some degree on component interactions; more than anything else it depends on the sound you discover you prefer. If you mentioned specific players, than asked about the quality of the transport in each, someone might be able to provide info... but I don't know how much farther ahead you would really be after that. Are you really ready to start considering the pros and cons of Sony vs. Philips, or TEAC VRDS vs. CEC? How easy will it be even to find out what transport a given player uses? Is that the important question?

My very humble personal opinion is that if I were in your shoes I probably would have stopped listening to my sound system except in the background. If I sat down to listen, my attention would wander. I'd pick up a book or think about exams. Emergency! Nine-one-one! Call the music medics!

Is that what's happening to you?

Most of us would agree with you: you need to change your source. I myself would have a burning desire to do it right now and not wait. As for what to, well, a NAD 541 or a Music Hall CD-25 would give you a better reason to listen right now. If you can look farther upscale, fine. If you can wait longer and save more, fine.

Once you get your next source, though, forget planning, stay open and listen, listen, listen. Listen to your system, to friends' systems, make friends with a dealer (hint: buy something) and listen to the best he's got. Go to a show. You'll come to know what you like within what's available and what you can afford. That will make your choice of a much better source and an upgrade path much easier when the time comes.

I think you are making absolutely the right decision in upgrading your source first. In fact, according to me you should sacrifice on other components to get the very best possible source. So many systems have a so-so front end, and at the finish line you can hear that oh-so clearly. My principle (given a finite budget) is that you should always have more resolution available at the source than downstream.

Upgrading from a $1k system to $20k system is a big step. Unless you inherit some money, you may not want to go from your former CD changer to a $2.5k CD player (or separates) simply because until you upgrade some of the other components, you will not hear all the differences in quality the extra money is paying for. And, until the rest of the upgrades are in place the player is depreciating in value and technology is progressing. I would buy a good used CD player which can be sold in a year or two at around the same price you paid for it.
That being said, I would recommend an all-in-one CD player. I had separates and went back to a one-box unit (resolution audio opus 21) and am very happy.

Agree with Bwyoung. I'm not also sure whether just a straight listening would help. In order to evaluate a real difference between two very good components one should know what details to pay attention on, and it's not obvious when go from $1K to $20K level. Criterias of what is a 'good sound' should be adopted to a new quality level. All this just requires a lot of time...

In regards to CDP or DAC+Transport, I was recently looking for the answer on a very same question, one very experinsed person gave me an idea, for which I still feel obliged to him. He explained that while I consider myself on a budget (whatever it means for me), it worth to get more upscale integrated component then two cheaper separate ones. After some listening I realized the wisdom of this rule (there are some exception, such as power requirement for amplifiers, if one need it). It saved me money and I'm happy with my sound. Just my humble opinion.

Thanks for your input. I should clarify that the 20k system will be a work in process over several years. I have heard those systems (and several at the 5 and 10k level) and enjoyed myself immensely. On the other hand, I know that dropping that number on my wife at one time purchase would lead to a quick divorce settlement, LOL! In the meantime I have considered an upgrade path that will give me greater musicality without a lot of lateral moves that will surely end up costing me more money in the long run. To that end I have thought of an upgrade path such as:

1. 2.5k cd player
2. 2.5 k integrated amplifier
3. 2.5k speakers
4. sell the source and purchase a 5k cd player
5. 5k preamp
6. sell the integrated amp and purchase a seperate 5k amp
7. sell the speakers and purchase 5k speakers

Make sense?

Tobias,
Wow, what a detailed reponse. I really appreciate the time and consideration you put into that. I've actually spent a bit of time listening to a number of sources, amps and speakers and have concerns about taking what I think might be a small step up with the Music Hall or NAD cd players. I've heard Music Hall and found it not to my liking with several different speaker (ref 3a, Totem, B&W NT's) and amps (Shanling, Linar, Passion). In every case I found excessive sibilance and a tendancy toward a bright presentation. Quite surprisingly, my current system is acutally musically fairly satisfying. I think that the NAD receiver and PSB speakers may err on the side of warmth which may mask some of the harshness associated with my entry level Marantz source. I know I'm not gettin gthe level of detail that I aspire to, but it's not to the point that I have to use it only for background music.

The source that I have most appreciated was the Audio Note 2.1x. To a lesser degree was the Musical Fidelity a3.2. Both made a significant impression and upgrade over my current sound. Did I just answer my own question? LOL! Are their other sources in between that I should listen to that might help on the cd player vs. DAC question?