A friend with a SM3 came by last Saturday and we hooked it up to my Benchmark DAC-1 to compare the two headamps.
The SM3 was fed directly by the DAC-1 in calibrated mode via a one-meter Zu Pivot cable. We used my friend's HD650 for all comparisons and referenced the volume with a Radio Shack sound level meter and a 1 KHz tone.
Short of it is that the two headamps have a lot more in common than they do differences. The differences we heard came down to the DAC-1 being slightly faster with a bit more treble detail and the SM3 being a smoother sounding amp.
Trying to find differences beyond this, for me, amounts to grasping for the hairs on a flea's rear end. However, maybe my friend might want to post his own conclusion about what he heard.
One factor that could change the opinion is break-in time. Both the SM3 and DAC-1 are fairly new and both have about 80-100 hours of use. I mention this because at the recent Vancouver headphone meet, we got to listen to another SM3 with at least 150 hours of use and there was a definite improvement in sound over the newer SM3. Give the SM3 more time to burn-in and it could be more than just subtle differences, but then again, the DAC-1 might also benefit from longer burn-in too.
Thus, I would not purchase a SM3 on the basis of it displacing a DAC-1 being used as a headamp. However, I would definitely consider it as a portable amp, but that's whole 'nother topic.
The SM-3 requires 150 to 200 hours of break-in before it even starts to sound near its potential. I experienced this three times and while I accept break-in, the SM-3 has a more noticable change than most any other piece of equipment I have heard. The base line I use is a well broken in SM-3 and the SR71.
The opamp used will also make a big difference taking the amp from nice to excellent depending on what opamp is used. I get the best results with the AD797, 627 and the 604.