[Riley]

First off, everything is going to be either connected through optical cable from my tv or optical cable from my computer.
Well, I guess I'll start by telling you my set up, I have a Sony STR DH510 5.1 receiver, 2 polk monitor 60's in the front, 2 polk monitor 30's in the back and a polk RM8 in front along with an Elemental Design A2-300 subwoofer(Best part of the system, which I'm not replacing).

I know that the receiver is really bottle necking everything considering my whole collection is in FLAC and I can't tell the difference between FLAC and 192KBPS. I know its just not my hearing because I've listened to others systems and I get blown away at the difference.

So here is my whole plan: Get rid of the receiver, two rear channels and center channel and replace with a dac/amp so on.
What I need help from you guys is what is the best way to get sound from that optical cable to my speakers(Perfer two inputs, but I can always unplug one and plug in another? And what are some good speakers to upgrade to? My budget is probably sub $1000 without the speakers, and I guess around $1000 for the pair of speakers too.


Sorry for the slight ramble, and unorganized post 

[django11]

Virtue amp, GR Research N2x or N3.  Read about them here.   Not sure about the source.

[Riley]

Like I said, the source will be a tos-link/optical cable.

[neekomax]

I'm very happy with my Soundfield Audio Monitor 1 speakers. They represent a pretty unique approach to speaker design, and can be had for $1,300. Not affiliated with the manufacturer, just a happy customer. Read more here: http://www.audiocircle.com/index.php?topic=97955.msg1032813;topicseen#new

Others say they are super pleased with Magnepan MMG planar speakers.

As far as a good solution for a DAC/pre/amp, I think the Peachtree Audio stuff is pretty good as well. I have the Decco. Multiple digital and analog inputs, audiophile stuff like a tube buffer stage, and full remote control. http://signalpathint.com/

Or you could go the Emotiva route. Separate DAC and and amp on that one. 125 watts @ 8 ohms. - http://emotiva.com/upa2.shtm, DAC is here: http://emotiva.com/xda1.shtm. No analog ins on the digital pre/DAC, however.

Spend most of your budget on speakers, IMHO. Ok, $.02 given. Most of all, have fun with it.

[JLM]

You can do much better than decent for $2k (or maybe a smidge more) if you think out of the box.

Oppo 93 universal player ($500), all formats (Blu-ray, 3D, DVD, etc.), Pandora, Netflix on demand, USB inputs, etc. very well reviewed, stupid good/no brainer (no real need to spend the extra $500 for the Sabre chip if you check out the comparative reviews)

Blue Sky Sat 6.5 Mk II (check with John Casler here at A.C. for competitive prices) 2-way active standmounts (very neutral, flat frequency response, extremely dynamic, used primarily in recording studios but also marketed for home use), so no power amp needed (save money/complexity/distortion)

Jaton RC2000P pre-amp (again check with Casler for attractive prices), monster build quality, competes with $3k pre-amps, has subwoofer management, DAC (two digital inputs), XLR outputs (so you can make long interconnect runs to those Blue Sky speakers)

Thanks to John you can do this.

[eclein]

I had almost your identical setup and just split everything in two in the end but the thing I use is a switch for my optical cable. Before I explain....your source is the TV only????

I use a Playstation 3 which when setup correctly allows two simultaneous audio outputs so I use the HDMI output to my TV and the 2nd audio output is optical and I use an optical cable switcher to direct the audio from my PS3 to either my 5.1 receiver or my DAC which finally ends at a 2.0 amp with a passive sub output- A Virtue Audio TWO.2.

I did everything over except the TV and the PS3- I had all "those or Bo__" speakers and a fella on here suggested I chuck them and stick with the JBL's I was using for surround....thats when the JBL thing launched and I started to read everything here on these forums..........I have used Speakers (Craigs List), a used 5.1 receiver (CL also), Virtue Audio Amp and CD player (New-talk to Seth at Virtue he will be a big help if you want the help), Grant Fidelity Tube DAC-09 which is a $200 DAC/ Pre-amp a keystone in my system..... my total was like $1200-1500 bucks and that was just the new stuff the CL stuff was like $90 total over an entire summer....LOL...it was a good year for JBL's...I had 5 pair once......on and on it goes, its a blast enjoy!!!!!

[srb]

Jaton RC2000P pre-amp (again check with Casler for attractive prices), monster build quality, competes with $3k pre-amps, has subwoofer management, DAC (two digital inputs), XLR outputs (so you can make long interconnect runs to those Blue Sky speakers)

It is actually the RC2000S model (MSRP $1500) that adds the built-in DAC and LFE output to the 'P' model.  It has one optical and one coaxial input.  Are both of your sources optical or will you have the option of one of them being coaxial?

Edit:  There is an RC2000S demo return available from Jaton, listed on Audiogon for $700 shipped/30-day return.  Sounds like a good deal, I'm surprised the ad is on its 32nd day.
 
The Blue Sky Sat 6.5 Mk II speakers also look nice and appear to sell for ~$700 each.  Having never heard the Blue Sky monitors myself, I would be personally be more inclined to go with something I have heard and that someone else on AudioCircle has just recently posted about (http://www.audiocircle.com/index.php?topic=100696.msg1032519#msg1032519), the similarly priced Dynaudio BM6A MkII powered monitors, which sell for around $1300/pair.

The idea of a remote controlled preamp/DAC and powered monitors is certainly another interesting alternative.

Steve