In order to answer the question/questions, knowing your buddy's existing components would be helpful. If one of the existing components is much worse than the others, perhaps that component should be replaced first.
Nonethless,
Garbage in = garbage out. Your buddy cannot have hi-fi sound without a hi-fi source. Therefore, your buddy needs a DAC.
However, a good analog output cannot be adequately amplified to be of use to the amplifier without a good pre-amp. The preamp is the heart of the system, IMO. I cannot overstate the importance of a good active preamp. The AVA preamps are superb. Your buddy needs a preamp.
The amplifier will make the least difference, IMO, if the existing amplifier is moderately competent.
As an example, during a week last year, when my Insight preamp was with Frank for an upgrade, I was without a decent spare preamp. For convenience, I tried the pre-out from a 20 year old NAD 3240PE integrated amp for a preamp in front of my Insight 440. The sound was horrid. I suffered for a week-and-a-half while my preamp was with Frank or in transit. That week, I was having withdrawal symptoms, as indicated by my irritability. When the preamp was delivered, I re-connected the preamp, and the improvement was extraordinary. As an experiment, I connected the Insight+ preamp to the amplifier inputs of the NAD integrated amp, and while the sound was much worse than with the Insight 440 amplifier, and otherwise unlivable, the difference was more substantial with the NAD preamp outputs in front of the Insight 440.
If your buddy can only upgrade two components, initially, I think that he should acquire the DAC and preamp, and then, later, the amp. If he can only upgrade one component, initially, then I think that he should acquire the preamp. However, if his source is terrible, then he needs to improve the source before the preamp, because the preamp will only process the source.
1) Speakers, 2) then source, 3) then preamp, and 4) then amp. If the source is not too bad, 1) Speakers, 2) then preamp, 3) then source, and 4) then amp. The reason that the speakers should be selected first, IMO, is that the speakers characteristics can be modified by the other components. For example, if the speakers have a hot tweeter, perhaps a tube preamp will tame the tweeters a little. I was listening with a pair of Linn speakers with very hot tweeters while I was waiting for my HT2-TL speakers, and I swapped my T8+ DAC for my Insight+ DAC because the T8 DAC has a little less gain at the top end, which made the sound from the Linn speakers much more livable. And while this might not apply to your buddy because he has efficient speakers, I think that finding an amp that has the power requirements to drive specific speakers has fewer restrictions than selecting speakers, based upon their suitability of use with a listener's existing amp, that would otherwise be the best speakers for the listener in the listener's specific room. Selecting a pair of speakers for use with a specific amp has some limiting factors, as does buying a car to use with tires that you already own.