What is a DAC and how do they work?

When dealing with audio in the digital domain, our signal is sent through a conversion process that transfers binary code information into an electrical signal that can be understood by playback mediums such as amplifiers, headphones, and speakers. This process occurs within a Digital to Analog Converter (DAC) and is found in many devices we use on a regular basis, such as our cell phones, computers, and televisions. 

For most users, the built-in DAC in your phone or computer is good enough for decoding a voice message or listening to some music casually, but for those looking for a more refined listening experience (such as audiophiles, musicians, gamers, or film enthusiasts) a DAC upgrade, usually in the form of an external DAC, can provide a significant improvement to the overall listening experience. Likewise, a DAC can DACs are available in a variety of configurations, each intended for specific uses, which we’ll get into a little later. First, let’s recap how sound is processed and interpreted and what can affect audio quality.

What are DACs

How sound is generated and processed

We interpret sound as a result of air pressure changes occurring, which our ears convert into an electrical impulse that can be received by our brain. The sound electrical signal is represented as a waveform and behaves as such, with positive and negative values. The amount of cycles a wave completes per second is known as the frequency and directly impacts the pitch of a sound (higher frequencies produce higher notes). Frequencies are identified using Hertz (Hz). We are capable of hearing frequencies within the range of around 20Hz to 20kHz (see our article on frequency response for more information on this topic). 

When a sound is recorded, it undergoes the process of Analog to Digital Conversion, whereby waveforms are converted into binary code to be understood by technology. To understand DACs, a basic comprehension of the reverse process is necessary; it occurs as follows:

The audio waveform enters an ADC (Analog to Digital Converter) within an audio interface/soundcard to prepare the signal to be accepted by a computer’s recording software. The attributes of this waveform are captured and encoded using binary code to be stored as data on a computer. There are generally three specifications that come into play here: Sample Rate, Bit Rate, and Bit Depth. 

Sample Rate refers to the number of samples of the waveform captured per second. CD-quality audio is usually sampled at 44,100 times per second (44.1kHz), while film audio is generally set at 48kHz for greater definition. There are other available sample rates, but these are the most common. A higher sample rate means greater frequency definition and, ultimately, less noise in the recording.

Bit Depth affects how dynamic a sound the converter will accept. 

A low bit depth operates in a small volume range. Anything exceeding this volume limit will cause unwanted noises to present themselves (often clipping – an audio phenomenon where pops and scratches appear in the recording, much like when you push the volume limit of a tiny Bluetooth speaker a little too hard). For most musical applications, a 16 or 24-bit setting is used. While we don’t really need to worry about Bit Rates here, it’s worth knowing that it concerns the overall definition and size of an audio file- a higher bit rate means more samples can be captured and stored, resulting in a more accurate recording.

A DAC converts binary information into an analog signal.

It should be noted that before fussing over DACs and where/how to use one in your system, it is important to ensure your digital music files are of high quality, as DACs will only make a poor-quality track sound worse. I’d recommend anything CD quality and above, preferably files stored in .wav, FLAC, ALAC, or DSD formats, or at the very least, a high-quality mp3. 

While the source material is very important, your listening medium is also critical if you’re serious about achieving superior sound quality. Using stock mobile phone earphones or an entry-level Hi-Fi system will certainly hold you back, so if you don’t already own a quality set of monitors or headphones, I’d recommend looking into some upgrades as well. For the finest sound quality, I’d recommend a pair of flat-response reference monitors or open-back headphones that won’t add much coloration to your source material and allow the DAC to truly work its magic. 

Are DACs worth it?

DACs can be useful, but are they worth the money? It’s a challenging question to answer, and the answer you get will depend on who you ask. It all comes down to what you look to get out of your audio experience, your existing sound devices, and your intention with the product.

Adding a DAC to your setup, in most cases, isn’t going to result in the same experience as buying a new pair of headphones, where the audio changes can be easily noted in many cases. Instead, a DAC can add those few extra notches of quality for the critical listener, assuming you have the equipment that will be able to utilize it best.

If you’re using a computer, having issues with the onboard DAC is not unheard of, which can result in problems with static or other audio issues. An external DAC can be useful in resolving these types of problems.

Casual music listeners are unlikely to ever really reap the benefits of having a DAC. Still, for audiophiles who pay close attention to each nuance, there is certainly something to be said about adding a DAC to one’s setup.

What kind of DAC do I need?

DACs are available in various form factors, and your intended uses will greatly affect which type and model would work best for you. 

The more compact side of the DAC world offers units in the shape and size of a USB stick for a laptop or PC or a small USB-C cable that can connect to your phone. These are useful if you’re planning on using one to enhance the sonic capabilities of your phone or laptop, for instance, and these compact units are generally powered by your device so there’s no need for an external power source.

These are handy for taking your DAC around with you but usually don’t offer many connectivity options aside from USB or a 1/8-inch headphone jack. For a portable DAC to use with a PC or laptop, the AudioQuest DragonFly is a great-sounding DAC that’s barely larger than a flash drive. It is USB-powered and can be linked to your headphones using the supplied 1/8-inch minijack connection. 

DragonFly USB DAC
The AudioQuest DragonFly – a compact USB DAC

If you’re looking for more connectivity and don’t plan on taking your DAC out, then a desktop unit may be more suitable for you as these can sit on your desk or TV unit and can offer some highly versatile I/O, including RCA, XLR, TS/TRS or AES/EBU. These are best used for studio and Hi-Fi applications or as part of your home theater system. These DACs usually require their own power source and supply a wide range of inputs and outputs, and nowadays, Bluetooth connectivity as well. Some desktop units also include their own volume control, so it can be used as a preamp if you wish. 

In addition to studio use, these sorts of DACs are also very common in the headphone audiophile communities. Because the nature of the game for many audiophiles is to get the utmost sound quality, investing in a DAC almost becomes mandatory, especially if you’ve already invested in high-end speakers. This desktop DAC type remains a popular choice for most headphone users.

For these applications, I’d recommend something like the AudioEngine D1, which is fairly compact yet makes for a great permanent install. The D1 features its own output volume control, and its ‘plug-and-play approach eliminates the need to re-route your computer’s sound each time you plan to use it. 

Or, if you’re looking at the fancier side of things, the Cambridge DACMagic Plus features a reasonable selection of inputs and outputs and allows for sample rate switching and phase inversion. 

Cambridge DACMagic Plus DAC
Different from the DragonFly above, the Cambridge DACMagic Plus has a more traditional external DAC design.

Does a DAC need an amplifier?

If you’re using a DAC for headphones, then not always. For traditional passive speakers, you will need an amplifier to power your speakers when using a DAC.

This is because a DAC is only a converter of signal. It will not supply sufficient power to your speakers without the amp. External DACs will typically include a headphone amp, meaning that headphone users won’t usually need an additional amplifier. However, DACs used with traditional speakers will require an additional amplifier to be used in conjunction with the DAC.


DACs can be useful for all audio enthusiasts, whether you’re looking for better sound quality for gaming or to get the most out of your speakers/headphones. You can think of DACs almost like a spoiler on a car. You can throw a bunch of spoilers on a Chevy Spark, but it’s not going to make you go any faster. If you’re the type of person who doesn’t know the bitrate of their music files, a DAC is probably not necessary and also not likely to benefit you. Only once you feel you’re being bottlenecked by your built-in DAC would we recommend picking up an external DAC. Our advice would be to first focus on the speakers/headphones.

Matthew Cox - Author
Written by
Matthew Cox

Matthew is an audio engineering graduate with a strong passion for post-production, recording engineering, and audio technology. Matthew is also an experienced musician with over a decade of experience in recording, touring, and performing. Matthew enjoys studying the inner workings of audio equipment and acoustics theory.

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