I owned a 2002 DRZ400S and did the following to it:
Yoshimura Head (ported and polished)
Yoshimura Valves and valve springs
Yoshimura Ignition kit
Yoshimura Titanium head pipe
Yoshimura Titanium exhaust
Full Race Tech suspension (forks and shock - springs, valves, oil)
Excell Rims, talon hubs, bulldog spokes
Works Connection clutch perch with compression release lever
etc., etc., etc.
I had over $10,000 in the bike and it was one sweet DRZ400S. Bike ran incredible and the suspension was pretty good.
I had sold a CR500 and an XR600 to go to the DRZ400. The bike was not as good on a track as a CR500, but a lot more fun to ride. And a lot lighter than the XR 600.
Then I decided to try the KTM 525 MXC. I had owned a KTM 300 MXC back in about 1996 and just loved it. And I was looking for a bike that was a bit more powerful than the DRZ and a lot better suspension.
The KTM 525 MXC was more than I expected. The DRZ is a nice trail bike, but the KTM is much more like a production race bike with much better components and fit and finish. And the KTM stock will blow the doors off any $10,000 modded DRZ. So the decison is easy for me.
I do have one problem with my KTM, which seems to be fairly common with the 525, and maybe the 450's. The head pipe leaks at the header flange. This is due to the weld not being very exact on the header flange. (Strange for a company that takes such pride in building an anal retentive near perfect fit and finish bike).
This causes air to be sucked into the engine during the intake stroke and causes backfiring. I am in the process of taking care of this with either a new header flange or sealing the headpipe with a sealant.
You will also need to re-jet the KTM for your altitude. JD Jetting sells kits that work great. Even with this small hassle, I would not go back to the DRZ if you want to do some serious riding. If you are just putting around in your back yard for a little fun on the weekend, a DRZ is fine, but go with the KTM if you want the bad boy dirt bike!
I might consider the 450 if I had it to do over. The 525 is one mean machine when it gets wound out. But I do like the additional speed when it is opened up, that is a total rush. I have heard that the 450 is better on tight trails which I do a lot of here in Colorado. But overall, I am very happy with the 525 MXC!