In my experience (Wavelet 1, 2, Vs,Valor) Wavelet can be a great preamp and DAC. Its combination of DSP, preamp, DAC, and crossover is hard to beat.
However a great preamp before Wavelet does sound better. I’ve never heard a preamp and DAC combination sound better than a separate preamp and DAC.
Likewise while the DAC in Wavelet sounds exceptionally competitive compared to many other DACs replacing it with a Baltic or other highly regarded DAC will boost the sound quality of your system which will only be limited by the quality of the DAC and preamp you replace it with.