You said you updated drivers, but did you update (or at least reinstall) Intel's Win 8.1 Chipset and Rapid Storage Technology Driver?

You might want to check the Intel site to see if there are even newer versions of both than offered by Dell...

Same here, I have the same problem at startup and after waking up after sleep, and sometimes the login screen doesn't show up right (no image), and the error message that says "Error occurred blah blah" takes a lot of time to show up :/

I don't have problems on the device manager.

This happened* after I installed a new SSD for the SO, but it was working fine for weeks, now I  have this problem :( 

If I can resolve the issue I'll let you know.

Issues with DVD and CD drives under Win 8.1 seem to be a common problem.

You can try the automated Fix-It linked under "Resolution 2" from Microsoft, here. Manually set a System Restore point first, just to be safe. :emotion-5:

Thanks for response, however I have managed to solve the CD/DVD ROM by doing a system restore.:emotion-1::emotion-21: However still having issue as per title, only way to deal with it so far is to never put the computer to sleep which isn't ideal but stops it from restarting and showing the dreaded blue screen. 

I will endeavor to find  solution - but gods where from...........................:emotion-6:

Intel Rapid Storage Technology Driver
This package provides the driver for the Intel Rapid Storage Technology and is supported on the XPS 2720 running the following Windows operating systems: Windows 8.1

http://ftp.us.dell.com/FOLDER01766180M/2/iRST_Intel_W814_A01_SETUP-HD4NH_ZPE.exe

Intel Rapid Storage Technology Driver

That was already suggested above but OP said it didn't help...

May need to run a Repair. But if the system came with Win 8, the Repair -at best- will only revert things to Win 8 and not 8.1. So 8.1 would have to be reinstalled afterwards. Be sure to back up personal files on external media before running a Repair, to be safe. :emotion-5:

Alternatively, try turning off Hybrid Sleep in Windows, or just set Windows to turn off the monitor and HDD after a certain period of inactivity but not put system to sleep.

Hey, did you ever solve your BSOD iastora.sys issue???  I'm having the exact same issue now with my 2720 (mid-2013).  Its because I had my HDD crash and I had to replace it.  I'm curious of how you solved the problem.

Thanks.

A clean installation of win 8.1 pro worked for me

Clean install would remove the INTEL IASTOR file.

SYSTEM THREAD EXCEPTION NOT HANDLED – Solutions Encyclopedia

“SYSTEM THREAD EXCEPTION NOT HANDLED” and “0X0000007E” both are the same BSOD (Blue screen of death) errors and that indicates there is a system thread generated an exception that the error handler did not catch in your windows operating system.

In a normal language, if you’ve seeing this error continuously on your screen that means your computer system might in some kind of windows and hardware problem. I know its feel really annoying when you get this error in middle of your work or may be on your systems startup.

The bad thing about this error is your computer doesn’t know which part or software of your PC is creating this problem and that’s why we need to troubleshoot this BSOD by the conditions what people is normally facing. Normally this error caused by different types of reasons what I’m all listed below and because of that you’ll need to try different solution in order to fix your computer.

CAUSE OF – SYSTEM THREAD EXCEPTION NOT HANDLED

• Boot Volume Problem (Hard disk problem)
• Drivers Corruption
• Windows Problem
• BIOS Corruption

click to see the full solution

www.deskdecode.com/how-to-fix-system-thread-exception-not-handled-0x0000007e/

Display drivers are one of the most common reason for this error to occur. We will uninstall them and then re-install the latest version of the display drivers. If you can log in to Windows for even a few minutes then skip to Step 2. But if you can’t even log in to Windows then start with booting into safe mode. see steps here