best pre-amp new or used for under $500?

About where to put money, I would say the speaker and preamp. I tried upgrade my amp, very little difference. I also tried an external DAC, although not a very high end version, also no noticeable difference. But after I upgrade the preamp, I can hear the difference right the way. And of course, the speaker should be the first component to buy in my opinion.

Gte357s - what head unit were you using before you tried an external DAC? And...which DAC, preamp and speakers are you talking about? Agree regarding the amp, I doubt I would be able to hear an audible improvement over my Rotel RB-1080 unless I spent 3x or 4x the money ($1500-$2000). Right now I have to get the pre-amp above the Rotel's level.
Although my Denon 3310 is doing pretty well in my little office. I took down the home theater system and moved it into my office, renovating the living room.
There is a small but insistent contingent of A'gonr's that insist on spending the big $$$ on the head unit first...But how much fun is that?!?

Right now, I am using Sony Blu-ray player, Maverick Audio DAC, Audible Illusions L1 preamp, McCormack DNA-1 Deluxe amp, and B&W CDM9NT speaker.

I had a Rotel CD player before, and then I compare with the cheapy Sony Blu-ray player, can't hear any significant difference. Then I thought the DAC in the Blu-ray player is the weakest link, and I want to go digital to stream music file from my computer, so, I bought Maverick Audio DAC. It is cheap, but reviews are not bad, so just to give a try. I don't think there is much audible improvement comparing to the Blu-ray player. I am not thinking to try out a tube DAC. For the amp, before I upgrade to McCormack, I use Rotel RB-1080. I don't have a chance to do A/B test, but the McCormack is slightly better based on my memory. But again, the improvement is not as big as upgrading the preamp from Rotel to AI.

If you are patient, you will find a Muse 3 @ $500.00. You won't find a Signature 3 at that price, but you won't find a better value than the Muse... Neutral, airy, nice slam and a remote to boot. Do your homework, read the reviews everywhere you can find.
I, like others can say, up your budget, but you'd be hard pressed to beat the Muse 3 for $800.00 to $1000.00 if what you are after is neutral and a remote.

This thread was not really started about DACs, but I thought I would relate the experience I had pushing music digitally through the Burr Brown 24/96 DACs in my Denon receiver. I dragged my old Toshiba HD-DVD player out of mothballs and used its optical output to pipe digital signal into the receiver, using a cheapo "redfish" plastic toslink cable from Best Buy (sacrilege on this forum?!?). Compared to my 15 year old Yamaha changer, all frequencies sound more extended and detailed. I can hear more of the music. Can't say too much about any improvement in imaging, I think the 685s trade that for neutrality. But anyways, a definite improvement.
We'll have to see what effect the loss of the changer has on my listening tendencies. The Yami changer has been boxed.