What makes a bigger change, dac or preamp?

First let me thank everyone for their advice and for educating me. Although I love the hobby its a bit confusing with the enormous amount of information out there. I like to buy things that will grow with my system instead of buying equipment on the fly then turning around and selling it in a couple months. I can't afford it although I wish I could :)

Thank everyone for clearing that up.

Agree with Buconero17, preamp makes a surprising contribution to the system sound.

preamps make a bigger difference by far than DAC's, But I would suspect a good DAC would make more difference than the DAC in the Touch. I've not listened to your Quad to comment, but I believe that is the real question.

I have come to the conclusion over the years that the preamp is the heart and soul of the system and a world class one in a world class system makes the biggest improvements I've personally heard. I would also add that I've never heard a preamp that knocks off my socks that is cheap. I'm recalling that you wanted to spend like 500 bucks. So in this case I would say definitely get a DAC with volume control. I personally own the Quad speakers you have and they sound really good with a Benchmark DAC that has volume control. I know you don't want to buy and then sell again but the Benchmark is readily available used and you can sell it back if you don't like it. If you are set on keeping the Quads and have one source then I would see no sense in getting a preamp. Otherwise if you were thinking of a bigger budget then you would be getting into a situation of possibly upgrading the speakers and getting a good integrated amp that would be a lot better than getting a great preamp for the Quads. I own the Quads and the Benchmark and I've never heard anything better for 1000 used price. Next step up is a better set of speakers and an integrated I think. I'm no arguing that the preamp is not the most important thing in a general sense but with your setup I'd say get a DAC with volume. There are plenty of choices around and under 1000 pick your flavor. I personally like the sound of the Benchmark with the Quads, that is what I'd get and it's an easy sell if you don't like it.

Cables. ;)