Audio Research, next upgrade?

I would actually keep the CD3 and get a decent DAC (better than the DAC in the CD3). I bet the CD3 is great as a transport and if any upgrade is needed, it would be the DAC. Also, a REF 3 or REF 5 would be a definite upgrade. But, listen to a REF 3 and REF 5 in your home if possible with direct comparison with your LS26 first.

enjoy

First,
Update the fuse in the CD3 MkII (I suggest a Furutech-make sure you install it correctly). This is a low cost change the works.

Second, update the power cord inthe CD3 MkII to a Shunyata Black Mamba CX version.

Third, update the fuse in the VT100 MKII, then try updating the power cord, use a shunyata CX Black Mamba here too.

Fourth, if you have a little more money, I would update the amplifier to a ref 110 or ref 150 or the CD player to a DAC8 and use my computer to playback WAV files.

Get a vinyl setup if you have the space and the desire. It's going to make a bigger impact on sound than any digital or amplification element you could possibly buy.

Ditto.

Not if he got rid of that dog and had a ls27 instead.
It would surprise all of you.
Of course vinyl always rules, but he may not be into it...yet..:)