Should Speakers come first in a gradual upgrade?


I got info hi-fi audio about a year ago, and I have what I consider a pretty balanced relatively low cost system (high cost for me because I'm just an airman in the Air Force): Monitor Audio 5i speakers, Audio Refinement Complete Amp, and Cambridge Audio D500 CD Player. Conneting it all together are a Transparent Audio Super RCA interconnect, Transparent MusicWave speaker cable/jumpers, and stock powercords. I have a budget of $1000-$1500 (plus whatever I can sell the stuff I'm replacing) to upgrade my system. I'm very happy with its basic sound now, though I'm looking to get smoother highs, a little more detail, as much of a 3d soundstage as I can, and more solid low end. With that in mind, I'm thinking of going to a mini-monitor/sub system. I'm wanting to spend all my budget on upgrading just one component to the highest quality I can afford now, and I'll upgrade the rest when I can (it'll probably be an 8-12 month wait before I can do another upgrade). The question is, is that a smart way to go, and if so, what component should I upgrade first? I've thought about replacing the CD-player with an Arcam 92. But then I've been thinking that getting a Cambridge Audio S700 DAC (includes HDCD decoder) w/ Transparent's premium digital cable may give me a sound equal/better/close to a $1500 player at a lower cost. I'm pretty happy with the sound of the Audio Refinement amp, so I'm not planning on replacing that anytime soon, plus I think upgrading the amp will have the smallest effect on getting the sound I'm looking for, as opposed to upgrading the speakers or CD player or adding a sub-woofer (am I right here?). As for speakers, I want to replace the 5i's with a premium mimi-monitor, and one that has caught my eye is the Eggleston Works Isabel. I think it has fantastic looks, and it has the dynaudio esotar tweeter which should give me the highs/detail/sound stage I'm looking for. I'm concerned though that the Audio Refinement amp will not adequately power the Isabels (the amp is rated at a very solid 50watts). Any other monitor suggestions? It seems like the Dynaudio 1.3's keep coming up, however, I don't have a way of auditioning them, and the Isabel seems to be made to a slightly higher quality and with higher quality parts (esotar tweeter, hovland musicaps, vishay resistors, cardas rhodium posts, etc). Finally, I plan on getting a REL Strata III subwoofer, with plans to get a second one down the road. I don't want to get the subwoofer now, because I think the bass in the 5i's are fine, though lacking in weight and extension. Plus, I'd rather get the better highs/detail/soundstage now, and wait on the bass. My ultimate goal is to build a great sounding system with the afore mentioned qualities for 8-10k, and I'm hoping that whatever component I get now will be a part of that 8-10k system. So I'm left wondering what should I upgrade first? What will make the biggest difference now? And what should come next? Thanks in advance for helping me out. Oh, my music tastes are diverse...some of my favorite tunes come from Sting, Cat Stevens, Itzhak Perlman, Peter Gabriel, Beethoven, Andreas Vollenweider, Stevie Ray Vaughn, and Led Zeppelin.

Thanks,
Gil

p.s. Any other military audiophiles out there?...I haven't met any yet...it's hard to explain to your fellow soldiers why you aren't crazy for wanting a 10k stereo that doesn't even have "surround sound".
poor_airman
Both the subwoofer and DAC camps make their cases well. Here's a suggestion on how to play. Buy Ric Schultz's EVO Millenium II DAC (for about $160 you can also get his digital coax and analogue interconnects). Blows away the Perp Tech P1/P2/P3(Wright-mod) in my experience.

If adding a quality dac "does it" for you that's it. If not, return it within 30 days for a complete refund. Since music is your interest go for the Storm over the Strata without question.

Not familiar with your wire so can't comment. Most would agree that it's system dependent so my opinion wouldn't mean much anyway!

BTW, one thing I'm sure all of us can agree on is that we appreciate what you are doing for us out there - God's speed and keep your head on a swivel.
I have a pair of the 5i's in my home theatre system and have found them to be very transparent. Changes in the source and cables in this system are quite noticeable. I, like you, prefer sacrificing bass for better mid/hi performance so I wouldn't add a sub yet. Filling the 5i's with lead shot will give them more/tighter bass repsonse so I would recommend doing this at least. As others have suggested, I would upgrade the source (in the form of a CDP), then experiment with cables that suit your taste. Good luck.
I wouldn't change anything for now except bringing in $1000 worth of analogue setup (something like VPI HW19 Junior with arm/cartridge)
Believe me it will bring more bass, more detailed highs and cheep-fast-growing analogue musical collection!
Gil-I will not waste your time with audio non-sense! But I do know another AudiogoN member who is in the armed service, he uses the moniker Pcc(his name is Pete), though he has not been here in a while. He and I are fairly good friends, despite never meeting each other! He has similar complaints of being under paid in an expensive hobby, his wife(WAF, damn it got anther one!) has extinguished his audio budget and is no longer aloud to come out and play with us, but I think he sneaks in every now and again. Try sending him an email I know he would like to here from someone in a similar situation.
~Tim
Another source first guy. If you're considering the Arcam 92 you might also want to try out the Linn Genki. Make the REL your very next step though! I don't care what anybody says, every pair of speakers needs a REL.