If you search the forums for audiophile or DAC, you'll uncover other peoples preferences on external DAC's
Then, if you're like me, you'll Google those brands and have a heart attack on the cost!
I personally route my Soundbridge via optical to my Home Theatre Receiver (Yamaha Rx-V530. I prefer the digital output fed through the Yamaha - the sound is brighter, deeper) but part of the reason was to appease my better half on the appearance of the spaghetti in 'her' living room.
By the way, there is an imperfection in the M1001 (digital or analog) as a result of upsampling to 48kHz (again search the forum for audiophile and noise). It manifests itself as digital noise in the background during quiet (near silent) parts of tracks. If you haven't noticed that, I'd suggest that what you're getting with your current set-up is meeting your needs.
I consider myself, like you, semi audiophile. I don't use treble and bass, avoid my amps digital processing (Rock, Jazz, Hall etc), my speakers are the right distance apart, height, I use speaker wire rather than bell wire etc. But....
There are plenty of folks who would look down on my set-up but it suits me and gives loads of enjoyment.
Oh - and blind testing of CD's and lossless files over the Soundbridge sound identical to me - so I don't need $5000 of kit to enjoy my $150 music player!