A DAC, or digital-to-analog converter, converts digital signals into analog signals. DACs are built into a variety of audio devices, including CD and DVD players. The DAC has one of the most important jobs in sound quality: it creates an analog signal from the digital pulses stored on a disc, and its accuracy determines the sound quality of the music we hear.

An external DAC is a separate component that is not built into a player and has many popular uses for audiophiles, gamers, and computer users. The most common use for an external DAC is to upgrade the DACs in an existing CD or DVD player. Digital technology is constantly changing and even a five-year-old CD or DVD player has DACs that have likely been improved since then.

Adding an external DAC upgrades the player without replacing it, extending its lifespan. Other uses for an external DAC include upgrading the sound of music stored on a PC or Mac computer or improving the sound quality of video games. In short, it is an effective way to upgrade the sound quality of many audio sources without replacing them.

The main benefit of a good external DAC is the sound quality. The audio quality of a digital-to-analog conversion is highly dependent on the bit rate, sampling rate, digital filters, and other electronic processes. A specialized DAC is designed for the best audio performance. DACs are also improved year after year, and older DACs, such as those in older CD and DVD players, do not perform as well as newer models. Computer audio also benefits from an external DAC, as the DACs built into computers are generally not of the best quality.