looking for upgrade suggestions - 12,000 to spend

Those Dunalvys either need to be replaced or modified. These speakers in stock form are NOT the "ULTRA" high resolution speakers that many audiophiles think they are. "ULTRA" high resolution will only be achieved with the best drivers and crossover components, and unfortunately, this is where Dunlavy skimps in his designs. I know of quite a few Dunlavy owners with SC-IVa's, SC-V's and Althenas. All of their speakers have been substantially improved by putting individualized zobel networks across each driver (a very cheap but effective mod, at less than $30.00 per speaker). Stan Warren of Supermods actually started this trend. Others have gone steps further by replacing that cheapo tweeter with a world class tweeter like the Morel MDT-33. (Shame on you Dunlavy for using such a meager cheapo tweeter!). You can also swap out those average Coils and Capacitors with some high quality parts. All of the above changes yield a much improved speaker that will have you wondering why Dunlavy has not implemented any of these no-brainer improvements himself. Once these changes are implemented, the speaker goes to a completely different level in musicality and listenability. We are talking about serious improvements here!

I agree with Ikarus. B&W800's are fantastic!....especially if you actively bi-amp them with the Krell KBX electronic crossover. If you have any questions about the fantastic speaker, fell free to contact me.

Richard

Buy a Kora Hermes upgraded DAC for the 39 and a pair of Gershman Avantgarde or Eggleston Andras. The Kora was the best upgrade I have done in a long time being in this hobby.

Wouldn't it be wiser to invest that money in the stock market, and enjoy the world-class stereo that you already have? I know, I know, stupid me; upgrading is always the way to go, right? It was just a thought...

There is no doubt that the room is one of the most overlooked aspects of an audio system. There is a product used in furnaces called spinglass that comes in 2x4 sheets 1, 1.5, 2 inch thick. They also have round tubes from 8 inch to 20 and 6 ft tall these make great acoustical room treatments. Yes you can hire some one but this stuff is so inexpensive and so easy to use that after a little trial and error you can get your room just fine. Once you get the spinglass you purchase material and wrap it with U pins a very easy process and then you use T pins to attach to the drywall. Anyone can do this and you will save a fortune. If you want an idea of what it looks like go to Stereophile page 174 and look at the ad by American Acoustic they sell essentially the same product except that they cover it for you.
After the room do not forget that everything starts at the wall. You seem to have decent powercords but you do not mention a good line conditioner like a Hydra, sound application, etc.
Also great audio racks and resonance control make a massive difference. One of the largest effects on my system was adding Zoethecus racks with the Z shelves. Yes they look awesome but the sonics are amazing.