i'm probably going to be blown away by the 701 without an amp, i'm using k81's at the moment!
or do you think I should get an amp right away
so if I keep the u3, and use it like MLE does- as a Digital transport to pipe DDL signal to a DAC/amp, or use analogue output to go to a headphone amp (is that what you do? if so what amp are you running?)
the only advantage of the recon then would be mac support, and console support (both good advantages), and would probably be a better solution than getting the DSS to use with consoles and mac (figured out that it probably won't work on mac without a dolby digital live output, which AFAIK isn't possible on mac), so the recon is the perfect solution then it seems!
disadvantage is that it's twice the price
I haven't used the U3 myself. Right now I'm using a DSS, analogue out to my tube amp, and I'm not particularly interested in seeking another DH product. I sold my Recon3D USB in a bundle with my AD700 headphones, a "complete gamer kit," but I miss the Recon, and I had it plugged into my computer via USB (dual-boots Mac and Windows, and it continues to provide power through USB even if turned off) and optical to my Xbox at the same time, then a headphone-to-RCA cable into my tube amp, then Q701. I don't currently own a proper external DAC, unless you count the DSS (works in stereo with the PC, but I don't use it that way), but that'll be the last thing I'll upgrade.
I'll actually make a weird recommendation. First, just plug your K701s into your device. It ought to still impress you with better refinement and detail, and be a clear upgrade. Then, save up for a good amp later, one you won't need to replace. It'll be like two surprises in just how great things can get, and you'll end up with a better amp.
I use a custom-made tube amp (a super simple 6DJ8 amp), a FiiO E12, and in my old apartment I used to use my Yamaha receiver for simplicity's sake (DAC, amp, surround processor, input switcher, and speaker amp all in one, with a remote control for bonus). Oh, I also used a FiiO E5 at first, that was ok and it did take a bit of the edge off of the treble, but better amps were better. Other good recommendations for amps are around, but I feel that tonally they're all pretty close if they're solid-state amps (which is partly why I'm playing with tubes), so pick one with a good match in high power and low output impedance.
I personally think THX TruStudio Pro was also an advantage of the Recon3D USB, but that's a taste thing.