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.
I have since upgraded my DAC to the terminator 15th running directly into the Wavelet II. No preamp. This is where I will be staying. System tweaks and upgrades have been my adventure the last 6 months. I have all upgraded cabling, poser cords, digital cabling, RJ45 cabling and even a new power conditioner. It just keeps getting better. I hope this new ownership at Legacy works out for the best.