The theme of the E10K is simplicity --- it reduces design complexity over the original E10 while simultaneously improving performance. I'd say it's a win-win for both the consumer and FiiO.
I compared it against the Dragonfly 1.2, and my feeling is that with respect to SQ, they perform similarly. The Dragonfly sounds a little dry but has less treble splashiness, perhaps due to a decent asynchronous jitter implementation. The Dragonfly isn't stellar in the distortion department, but I didn't really hear those problems when listening to it. Overall, I feel the E10K is comparable to the Dragonfly, losing out on USB performance but having better drive capability.