For the price range specified and to get your digital music to one location, I would recommend the Squeezebox. I personally have the Sonos because I wanted to have my music in multiple locations in my home. They both have digital outs so you can an external DAC. Keep in mind that accessing a large music library is difficult on the Squeeebox is difficult because of the small display. The Sonos has a great remote ocntrol with a large display that makes navigating my library very easy. Depending on how the music is encoded, an external DAC may not make any difference.