Are you going to pay for this yourself or are people going to contribute to the costs? If you are paying for it yourself, think of a TOTAL budget. You will then need to decide how many people to fit into your budget - so will you have more people taking part, but spend less per person - or will you have a select few and splurge on them?
If you are asking people to contribute to your party or charging for tickets, ask yourselves how much each person will be prepared to pay, and what is the MINIMUM amount of people you need to cover your costs. Make sure you write out a budget, with a list of everything you need to plan your party - and how much it will cost.
You can either buy CD / iTunes compilations or make up your own. Always check that they are not cover versions... if they are super cheap sometimes it's too good to be true! Dance relies on good music so make sure you do your research.