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I think the O2 + oDAC is the way to go or possibly the new desktop version of the O2 which is due out shortly. With regards to headphones I think the cheapest way to get something really good is the Sennheiser HD580 they are very cheap used and you can get spare parts for them from Sennheiser. That is probably a $400 setup. I would not recommend FiiO they are obsolete designs.
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