How would you improve the sound of Squeezebox?


I just set up a NAS music server with Squeezebox Duet. The convenience of accessing all my music collection is really a great thing. Now the question is, how would you improve the sound of the Squeezebox digital output? I heard people say that SB's outputs digital signals with much jitter, so what DAC's(~$1000) would you use to reduce the jitter? i.e. what DAC's has the better ability to handle jitter? Any other ways that you can improve the SB's SQ?
amaggie05
Dpac,

I've been eyeing the Bel canto Dac3 but kind of don't want to spend the bucks. Do you think the upgrade from SB/Benchmark to SB/Bel Canto is worth $2,500? (I wouldn't sell the benchmark, but, rather, move it over to my PC-rendering the Musical Fidelity XDAC3/PSU3 to the closet).
Cerrot,
It's more like (new dac1=1k, new bcdac3=2.5k, for 1.5k delta and used dac1=850,used bcdac3=1850, avg used for 1k delta ), and yes the diff is def worth it. In my system the dac1 was a bit on the analytical and dry side (If perhaps it's b/c the dac1 is more accurate then I must not like accurate). The bcdac3 is quite amazing. Very likely to be my last digital source for quite some time.
Thanks for the input. I am tempted. If I do it, I'll probably never listen to my Esoteric.
I had been running the digital output from my Squeezebox through my Audio Aero Capitole digital input with great results.

I also have a Transporter in my system and I am now running both through my Anthem D2. Really good results.

The Squeezebox DAC is not a good as the Transporter and the Transporter DAC is a bit too analytic...not all that warm-sounding...so using either the Capitole's DAC or (even better) using the D2 DAC delivers what I want.

Having said that, I am really impressed with either Slim Device product and I highly reccommend either, budget permitting.
I also just sold my Apollo for a SB Duet. Running 50' hard line ethernet, stock Duet, digital out into a DAC with tube output stage I custom built. IMO the real limiter on the Apollo (and most CDPs) is implementation of the analog output stage, which is why I built my own DAC.

The SB Duet is an excellent digital source. Using its internal DAC, I would generally agree with Cerrot's comments above - good, but there is better. But at the price - its a steal.