Better Electronics or New Cables???

Both! But electronics first - cables are as important as any component in the chain. Generally components are a bigger investment so alot of people cable up or change cables several times before upgrading other components. IMO start with your power - dedicated lines if possible and then get the best front end you can afford. Next get after market power cords for every component that is detachable. I would then go for your lungs on an amplifier, then preamp unless you're bypassing this stage. Then cables, then speakers. Alot of people go through this process in reverse but I think really solid power and electronics will make make even average speakers above average. When you have completed each step - START OVER!!

Start with your source.Cd/Turtable.Put the most money there.The theory garbage in garbage out is true.If you put a lousy single into a great amp it will sound lousy.Put a great single in a lousy amp and i wont sound to bad.Dont get to bent out of shape on wire its the biggest scam in audio.Dont get me wrong good cables make a difference.You just dont have to spent stupid money to get good cables.I have done blind a/b testing with cables Interconnects in prices of 100 up to 1000 and all ranges in between.the more you spend does not allways get you best sound.The best interconnect period i have heard and been validated by others is only 299.00.So dont be fooled by the cable hype.Find some dealers in your area and take a bunch home and listen.But put your money into the best source you can afford.

It all depends where you're starting from. If you have Adcom stuff, buy new electronics. If you own a(for example) Jeff Rowland Design Group amp, obviously $1K will not buy you anything better.

If you covered basics like dedicated line... if money is available front end electronics and interconnects

The only way to answer your question is to know the starting point. As alluded to by another responder, if you spend 1K upgrading components in what was a 1K total system, that might make sense improve componentry,especially speakers if they were weak to begin with. However, if you spend 1k upgrading a 5-kk system, them the greater impact could come from cables. I have recently started experimenting and have found that far smaller investments in cabling can make far larger differences. But again, while my total system was about 6K, the weak links (no pun intended) were the best buy stock monster cable interconnects and speaker wire. I am now experimenting with Nordost interconnect (sonic wind made a huge difference) and the Flatline gold II speaker connects. I am less sure about the speaker wire and will be experimenting with other manufacturers. But for a total of less than $500, the sonic improvement (in both interconnect and speaker cable) has been staggering.