Can Highend IC improve equipment downstream??

An audiophile friend made the following argument to me:

"Stop looking for a new CD player. With a very good to excellent high-end interconnect you will not only improve the performance of the CD, but other downstream components."

I had to disagree with my friend claiming a $400 or $500 IC is not going to first, magically transform the playback sound quality of a $1000.00 CD player, or secondly, also improve the sound quality of downstream components. Improvements might be just marginal or moderate.

It strikes me that every level of CD player is designed with a set performance goal accomplished by the quality of its parts and construction. There is limit to what it can do. Obviously, a $50 IC will not bring it to peak performance like a $350 to $500 cable. And, there may even be ICs in the $250 range that may get a player close to that goal Let us assume for this issue the components can ALSO be either separates or an integrated amp

Maybe, I am wrong and my friend is right. Nevertheless, I think my friend's argument is based more on selling me on the idea than qualifying his point.

I recall seeing in a recent thread about speaker cable recommendations where a member advised the poster to.... "change speakers first before going out and dropping a $1000 plus on new speaker cables" Obviously, the member felt that speakers of the poster were the weak link in the audio chain, not the cable on electronics.

Would like to hear pros and cons on this issue. Jim