Whatever else you may have heard about Krell's Dan D'Agostino, he has a wicked sense of humour. This fearsome high-end has been known to succumb to a fit of the giggles which can last for hours. So it was probably with tongue-in-cheek and a dose of British irony that his 'baby' package of KAV-280cd player, KAV-300iL integrated amp and the wild new LAT-2 speaker was dubbed 'The Executive System'. Then again, maybe not, if you abandon irony and admit that only executives can afford it.

Such office-related nomenclature, however, is not in anticipation of the earnings of the target audience. Because it's compact by Krell standards and fully remote-controllable, you can just picture the electronics nestling on a shelf to the side of some eye-watering oval desk of solid bird's-eye maple, the speakers on their dedicated pedestals flanking either side of the door into the CEO's private sanctum. Imagine: the doors open, in walks a secretary, or a client, or the firm's lawyers, said executive framing them with a brace of Krell speakers. This is high-finance power tools taken to a new level. Or should that read 'executive toys'?

Unlike, however, those irritating, clacking chrome balls or over-priced Montblanc pen sets, the Krell Executive System is actually a no-compromise high-end audio array which would thrill the hell out of any one of us in ANY environment. Its chic, office- (or kitchen-, or bedroom-) friendly size and styling belies some of the most surprising components I've used in ages. And it's the size which deceives the most, because - even after years of compact KAV-series components - we still think of Krell gear as intrinsically over-endowed in the dimension stakes.

Both the KAV-280CD player and the KAV-300iL integrated amplifier share the same chassis for easy stacking. Measuring 17.25x3.5x16.5in (WHD), just the depth is slightly excessive. Gorgeous in natural aluminium with shiny chromed corners, the two pieces can only be described as 'sleek', and are, for my money, not merely the best-looking Krell hardware I've ever seen: they're also the best-finished. However much some of us are in awe of Krell (not least because Dan scares the shit out of us), there have been rough edges, blood-letting heat sinks, poor fit and dust-grabbing finishes in the past. If you covered the badges on these products, you'd think that Hasselblad had suddenly turned to upscale audio, while turning its back on black.

Inside the KAV-280cd is a mechanically-isolated transport mechanism and tweaked-to-the-extreme analogue circuitry producing a sound like a baby sister to the £23,500 KPS25sc CD player. Naturally, it lacks that unit's preamp and converter facilities and - because the '280 is a front-loader - that party-piece of a lid, but you know that it was voiced by the same team: loads of detail, eerie silences where they should be, transient speed up the kazoo. The output circuitry features four Burr-Brown PCM-1704 24-bit DACs to providing fully balanced operation from the DACs to the output; I ran the '280 into the KAV-300iL in fully balanced mode using the latter's single set of XLR-equipped balanced line inputs. The DSP digital filter provides 8x oversampling, and the unit boasts Krell Class A direct-coupled circuitry.

Buyers of both units will find that they have two identical remotes, especially generous and useful because gone are the massive slabs of machined aluminium of yore. Krell has come up with an ultra-cool remote with the frontal area of a cigarette pack but a thickness of a mere 3/16ths of an inch. Talk about 'ease of slipping between the cushions on your sofa' - but no worries as you have one spare to put in a safe place. With a minimum of buttons, all protected behind a single-piece membrane, you can control both units and other Krell hardware. Moreover, with 12V triggers via 3.4mm mini plugs built into both pieces and working in both directions, you can switch on the entire system from either the CD player or the amp - it's up to you.

Along with the 12V input and output, the back of the KAV-280cd also bears an RC-5 input for integration into a remote control system, an IEC mains input, a user-replaceable line fuse, coaxial and TOSlink optical digital outputs and a choice of RCA line-level single-ended outputs or the aforementioned balanced XLRs. Trust me: the balanced sounds better - cleaner, more dynamic, with bass so tight you'd think you wiped your butt with alum.

Krell kept front-panel clutter to a minimum: At the far left is the on-off button, which you'll rarely use once you try the remote, sited below LEDs for 'stand-by' (red) and 'on' (blue); as this system's on/off status works from remote, you'll probably leave it powered at all times. Beneath a display informing you of all the requisite time and track information are the transport controls, while the tray is at the right. Aside from not touching anything while it goes through an 'initialising' period when it's connected to the mains - which you will only experience again if you switch it off at the mains or unplug it - operating the '280 is absolutely straightforward.

So, too, the KAV-300iL, Krell's interpretation of what the well-dressed senior administrator wants in an integrated amplifier. Although fundamentally an integrated, it can also act as a preamplifier because of a set of line outputs (alongside the tape outputs), and the 'home theatre throughput' allows easy incorporation into a multi-channel set-up for purist/two-channel audio duties. In addition to three single-ended line-level inputs plus tape-in, the KAV-300iL also has a single set of balanced inputs, via XLR, as mentioned above; dismiss, therefore, any notion that this is some form of compromise in the Krell hierarchy. For pure audiophilic demands, this has a fully-balanced signal path from input to output for at least one source, while the amp as a whole is a wide bandwidth design with low negative feedback; all circuits up to the driver stage are pure Class A.

It's easy to figure out how Krell fit a CD player into such a low-profile enclosure; portables have shown how small CD players can be. ButKrell amps are, traditionally, massive affairs. The KAV-300iL makes extensive use of Krell's new surface mount technology to create a truly compact amp which is still capable of 200W/ch into 8 ohms or 400W/ch into 4 ohms, and, yes, I drove the Apogee Scintillas with it. (More about that later, though.) As the company literature puts it, surface mount technology, "...allows individual circuit elements to be placed very close together. This shortens signal paths and allows circuit elements to operate at the same temperature, resulting in more accurate signal transfer and enhanced reliability."

As with the CD player, the front is clean, a welcome break from A/V controllers with up to 60 buttons on them. The extreme left section duplicates the '280, with two LEDs and an on/off button in the same array. Next is an IR sensor, followed by buttons to choose the four inputs (B-1 for the balanced and S-1, S-2 and S-3 for the single-ended line inputs), a tape monitor button and a mute button with their own LEDs, a display which provides level read-out, balance status and other information, and buttons for level up and down. The display is no conceit: without a rotary for volume or balance, you need the numbers for a visual indicator, in place of a knob's pointer position. I'm partial to rotary controls for volume, but these buttons are no hardship as I used the remote control all the time.

Krell has used top-grade fittings at the back, with stout connectors for all inputs and outputs, plus rugged multi-way binding posts featuring the most intelligent solution yet to the irritating issue of CE compliance. They arrive with the sockets filled, but, instead of having to butcher the plastic inserts, they screw out easily. Also fitted are separate user-replaceable fuses for the left and right channels, and the same complement of remote control triggers as offered by the CD player.

Now we come to the piece de resistance which has the industry in a tizz [see sidebar]. The LAT-2 is the second (or third, if you count the company's subwoofer) Krell Lossless Acoustic Transducer loudspeaker, a small two-way system designed ostensibly to be used as rear channels in a multi-channel system with the LAT-1 floorstander at the front. But so mighty is this two-way that it has enough of the Right Stuff to serve not only as the speakers in this Krell 'mini' system, it's probably good enough to see of any speaker I can name which you would use in a room under 15x30ft. Think of it as the top section of the LAT-1 (to be reviewed later this year, when I can find a couple of masochists willing to help me shift 250lbs) and you're getting warm.

Nothing about the LAT-2 is familiar. Even the grille - the concept borrowed with permission from Sonus Faber, who use it on the Homage series - is made of rubber strings rather than the Italian's cloth-covered cords. There isn't a splinter of wood in sight, the entire cabinet made from solid aluminium extrusions, with wall thicknesses of 0.75 to 1.0 inch. As DD puts it, "Aluminium is the best material for the job, other than concrete and lead, which aren't practical choices. Aluminium possesses the ideal combination of structural rigidity and resonance damping characteristics. Within the audio pass-band, our cabinets are sonically inert - something you can't say about any wood or wood derivative."

Designed for stand- or shelf-mounting (allowing space for the two rear-firing ports), the LAT-2 is a two-way system roughly the size of a Sonus Faber Guarneri, employing a slight rearward taper, the curvature designed to minimize the effects of internal standing waves and external high-frequency diffraction. And there, grilles notwithstanding, the similarity ends. In common with the LAT-1, with which it shares cabinet construction and a strange-looking 1in tweeter with a lethal phase plug in its middle, the smaller model's 7in woofer is paper-coned, the textured diaphragm made of 'multifaceted cone construction'. Its proprietary suspension design is the same as the midrange units in the LAT-1.

At the back are two bass ports, "precisely dimensioned, flared, and positioned with respect to the woofer to eliminate turbulence while providing the correct acoustic loading." Beneath them are huge binding posts which - absurdly - are too close together; later production will space them further apart so the 'wings' don't hit each other. But Krell must have foreseen this because, packed with the speakers, there are gold-plated, solid brass replacement 'caps' which you tighten with a spanner rather than by hand. And they look more luxurious.

(I must mention the 'genius' packaging. Each LAT-2 weighs 75lb - not 'unliftable', but a strain nonetheless, especially as you don't want to mash a driver. While I would implore you to unpack these with a friend, they can be handled alone because the box was designed so that the sides 'fall down; when the lid is removed. This minimises the area over which you have to lift them. And if I can do it, anyone can...)

Only a single pair of terminals is fitted because Krell designed the crossover to preclude bi-wiring. The crossover is made with amplifier-grade circuitry for maximum power handling and low distortion, the components mounted on a 1/8in thick glass epoxy circuit board with 4oz copper traces, "to ensure low microphony, low resistance, low inductance, and high current handling." It's a 2nd order network, crossing over at 2.7kHz.

Krell has created a genuinely striking speaker in the LAT-2 (and, for that matter, the LAT-1), the all-aluminium construction and the fluting and ribbing and heavy-duty bolts - hell, this is the Hummer of speakers oozing muscularity from every groove; I can only imagine how sinister it must look in black. Shielded for use in home theatre applications, suggesting life beyond huge Krell amps, it's easier to drive than it looks. I heard utterly beautiful noises from it driven by an 8W Loth-X single-ended triode amp...which I quickly switched off when the earth shook, DD smacking the planet in Thor-like fashion to indicate his disgust with my insouciance. Whatever, it works with real-world amps, but it swings, sings and shakes its booty when driven by three-figure wattages.

While the CD player was superb, and easily up to the task with its precision, fine detail, speed and exceptional three-dimensionality, the amp and the speakers are the joint stars. Again, DD will snort like a bull, the steam indicating his displeasure, when I state that I derived greater joy from the KAV-300iL than any Krell amp I can recall. Sweet, fast, solid, coherent: one burst of a capella from the Persuasions followed by the bombast of Kodo drumming showed that this amplifier can operate in both 'sport' and 'dress' modes, nothing upsetting it nor even stretching it.

To put it through 'period' paces, I hooked it up to the evil-to-drive 1 ohm Apogee Scintilla of mid-1980s vintage and the bastard of a speaker which gave Krell its initial unique selling point. It produced the very BEST sound I have EVER heard from the Scintillas, and power was never an issue. Make of that what you will, but I would take the KAV-300iL over any other solid-state amp I can name south of the Theta Dreadnaught. And over most above that. That rumble was DD, kicking the UK distributor for letting me near the '300 and revealing it to be the sleeper in the range.

But then we come to the speakers. 'Magic' is an over-used word in audio reviewing, resorted to when we run out of superlatives. Too bad: the LAT-2 simply has it all, and that makes it about as supernatural as it gets. Bass which defies its dimensions. No compression nor clipping at levels in excess of 100dB at 6ft, the threshold of pain setting in before the LAT-2 craps out. Speed? As fast as any ribbon or ESL. Bass so extended that visitors asked where I hid the sub. A soundstage so wide and deep as to beggar belief. Above all? In complete contrast with its menacing mien, its sheer all-metal presence, the LAT-2 demonstrates finesse and delicacy which are bettered only by the original Quad ESL and certain LS3/5As - neither of which can produce anything like the playback levels nor soundstage of the LAT-2. In short, and I know that there are speaker designers who will dread what I'm about to say, it's a bona fide masterpiece.

Now, the bottom line. The LAT-2 costs £11,500, the 280cd sells for £3899 and the 300iL is £3498. Bargains? No. As a system, there's a bit of change from £19,000, which puts it well into what most of you will call the insanity category. But let me tell you something. If you arrange a demo, and the dealer has set it up as per the manuals, you will hear the most deliciously paradoxical system in high-end history: three relatively minuscule components undermining the inescapable audio belief that size matters. What makes it even sweeter is that this lethal audio hand-grenade comes from the man who popularised megaton amplification.

Absolute Sounds, 58 Durham Road, London SW20 0DE. Tel 0181 971 3909, FAX 0181 879 7962

SIDEBAR: THE BIGGER PICTURE
Aside from reminding know-it-all pundits that Dan D'Agostino is no amongst speaker designers, the LAT series of loudspeakers has far greater implications than merely allowing Krell to sell whole systems. High-end audio - like high-end watch manufacture, Formula 1 racing and other cutting-edge disciplines - is a world of both unspoken alliances and direct collaboration between what are, externally, deadly rivals. For 20 years, Krell threatened only its direct competitors, those who made electronics. As was the practice, it was able to exhibit with speakers from a variety of manufacturers, through the years including Wilson, B&W, Martin-Logan and others. Many independent brands operated in this manner, and older heads will recall the days when Audio Research was linked to Magnepan; most notably, Krell itself enjoyed a symbiotic relationship with the late, lamented Apogee during its early years.

With the arrival of Krell-made speakers, this dÈtente has now ended, and we're about to see a schism of even greater global impact than the split which occurred when Linn introduced electronics to Naim's dismay. Caught in the crossfire are both distributors and retailers who complemented the Krell line with suitable speakers; now, they will have to accommodate both. But we all know how most consumers respond to same-brand speakers and electronics: they assume, rightly, that the synergy will be automatic. Trouble is, as far as Krell's former allies will soon learn: the LAT speakers are nothing short of awe-inspiring.