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RE: System $300

I think if we're talking about a working system for $300, the lion's share of the investment needs to be on speakers, with just enough spared for necessary amplification. If you have ANY digital source now, I'd stick with that. An upgraded DAC can always come latter, but if you don't have good enough speakers (and an amp capable of properly driving them), you'll never hear the improvement in the source anyway.
BTW, although I don't think powered speakers are generally a good option in your price range, there is a pair of powered AudioPro speakers listed on ebay right now for $150 (+$100 shipping, unless you're in Washington area), that are a STEAL! If you're not familiar with AudioPro, they are a Swedish brand, known for their (very good)powered subs... the speakers on ebay are basically their sub with a two way speaker added in. Result is a near full range speaker (-3db is around 30hz, if memory serves).
...and, no I don't have anything to do with the listing, but I've heard them before, and they are quite nice. I'd been toying with picking them up myself, but until I pick up a new contract, I can't afford to throw money out for speakers that would end up sitting with all the others in my basement!
http://www.ebay.com/itm/200782867707?ssPageName=STRK:MEWAX:IT&_trksid=p3984.m1423.l2649



Edits: 06/28/12

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