I thought the zhalou was pretty good. I was a little disturbed by the DC offset. I never did hear the balanced outs. It sounded better than a $200 dac has a right to. It probably is better than the DAC1, tho I never compared them. It probbaly isn't better than the CEC DA53, tho I never compared them...it's not bad. With a discrete headphone amp, it's an unbelievable bargain, especially if you don't have dc offset issues. It probably does deserve to be compared to stratospheric dacs, but not by fanboys.