I know I bang on about DAVE Martin but it probably is one of the best DAC s on the planet at a price! I have taken two people from here who you know well to meet him and even they would tell you their jaws dropped!
You have a tough decision finding a DAC for £500 as there are so many of the buggers to choose from especially if you consider second hand aswell. It's like trying to choose a digital camera, there are a vast array on the market and they are all surpassed by new technology within 6 months. I suppose you could say you have to dive in sometime acknowledging this and maybe a current £500 DAC will be all you need and keep you happy for a good while.
I have heard a good many DACs and have constantly been surprised at how they have moved on from the good old days when they only resided in a CD player but I would say the significant improvements only come every couple of years. It's a pity the really good stuff is so expensive!
Personally if I were ever to go back to digital I would definitely not use a CD player but would use something like this
http://www.innuos.com/en/catalog/go/zen-mini-mk2-std
And lash it to a DAC of your choice.:)
If you ever want to hear why I go on about DAVE I can arrange for you to come and have a listen.:cool: