Bel Canto Dac 3

No, the DAC3 is entirely different from the DAC2 and sonically is a big step up. There are no tubes in the DAC3. It works very well as a preamplifier/DAC if you are only using digital sources.

when you say that it is ' sonically is a big step up'... what do you mean exactly.

AND is anyone able to definitively say whether USB is more accurate than S/PDIF (ie... is airport express an inferior technology to a direct USB ---> USB connection.)

Is it signature similar to the dac 2 or is known for being more analtical? have you seen any reviews out there?

I'd say that pretty much everything across the board has improved. I'm having to go by memory with the DAC2 since it has been discontinued for quite a while so I haven't played with one recently. So, I definitely can't give a detailed comparison. From memory, it has higher resolution than the DAC2 while remaining very smooth and unfatiguing. Tonally it is balanced more neutrally than the DAC2 as well. I personally found the DAC2 to be slightly overly warm and the DAC3 isn't. Don't misinterpret that as meaning that the DAC3 is cool, because it isn't at all IMHO. Considering that it is almost twice the price of the DAC2 it is no surprise that it is a considerably improved piece.

Sorry, I don't know the answer to your USB question.

Regarding the USB question - I just got back from the RMAF (Denver audio show) where they had done a test of the airport express with a top-of-the-line toslink cable vs. a direct usb cable and the USB cable was the clear winner...

Anyway, it appears that the DAC3 has 5 different digital inputs so I guess one can do one's own shootouts...

Good luck!