Having spent some time with my RED I'm really starting to enjoy it, many of the things that worried me in my initial impression settled in quite nicely.
The general SQ and power to drive is some of the strong points here, fitting my need for an compact laptop DAC+AMP when away from my desk and transparent desktop DAC connected to my amp of choice for very hard-to-drive-headphones.
Windows 10. System volume at 2% and foobar2k volume at 20%. Anything higher would make it louder than I'm comfortable with. Similar story with my Galaxy S7, currently the lowest 1/15 setting and it's still too damn loud. What's worse is on the cellphone the hiss is just unbearable (similar to setting system volume to 100% on the PC), both normal apps and with UAPP.
Wow, those IEMs must be super-sensitive! Most of my ready-for-iDevices gets enjoyably loud at around 20% (Win10 system volume, music player at 100%) on my RED with some room left for "rocking out" even higher. The Fostex T50RPs (Mk3) on the other hand have to be roughly at 50% (still, system volume) for the same volume-level.
I also found the Dragonfly Red to be much too loud when using it with Windows PC, as it obviously was optimized for smartphone usage. I also was shocked when using it with PC and JRiver MC and foobar. Sent it back as obviously the new target group is no longer PC user as it was in former times. UAPP of course is no solution when using it with Windows and foobar or JRiver.
Switches back to my Dragonfly 1.2 which is highly acclaimed with PC usage.
I don´t really "get" this target group argument at all. In my (humble) opinion it pairs extremely well with my PCs, both as DAC+AMP and as DAC connected to external AMP.
Naturally, I haven't listened to every available DAC but I have some recent experience with the HRT Music Streamer II+ and I must say that the RED comes really close to it (and even surpassing in some areas) despite the RED retailing well below the HRT when it was available.
Did you let the RED settle in before you returned it? One thing I've found after 40~ish hours is that the upper mids and treble seemed to calm down, going from "shouty" to engaged and connecting much better with the lower octaves over-all.
I haven't heard the 1.2 but it must be a pretty amazing device if it's better than the RED.
There is one flaw I've noticed with Spotify+Windows 10 usage and that is every few minutes (maybe at each 10-15mins) it very briefly severely warps the music you are listening to, into what I can only describe as 'slow motion' with some robotic tones thrown in, almost as if the sound suddenly gets stuck in molasses for 3-5 seconds. It's very obvious and distracting. Not the faintest clue what causes this.
I haven't notice any weirdness in Spotify at all on at least three PCs (Windows 7, 10 and Ubuntu Linux, mixed and/or dual-booting) and I spend at least two hours a day with it as source.
Have you tried your Dragonfly on any other PC?