Understanding DACs: The Essential Component for Modern Audio Systems

Learn about DACs, their purpose, and why they're crucial for high-quality audio experiences.

What is a DAC and Why is it Needed?

Did you know that most of us use at least one Digital-to-Analog Converter (DAC) every single day? These little powerhouses are built into devices like computers, tablets, and smartphones. The DAC plays a fundamental role in the reproduction of digital music, converting countless streams of digital data from your favorite songs into analog signals that our speakers, headphones, and ears can understand.

The truth is, sound needs an analog waveform to be transmitted, and without a DAC performing this essential conversion, your digital music collection is merely an impressive array of “ones and zeros” that only makes sense in a digital environment.

In short, DACs are instrumental in making digital music worthwhile! So, any device acting as a source of digital sound—whether it's a CD player, Blu-ray player, digital TV box, gaming console, laptop, computer, phone, or portable music player—requires a DAC, either built-in or external, to convert its digital audio signal into analog before outputting it.

Most everyday multitasking digital products come with built-in DACs, but the problem is these DAC circuits are often not efficient enough for precise conversion, and thus they fail to accurately convey the quality of the original recording.

These are universal devices that obviously have to handle a lot of other tasks as well, so we can’t expect them to prioritize digital sound conversion and playback above all else. This is precisely why upgrading to a standalone external DAC—designed solely for this conversion process—can be the simplest way to get the most out of your digital music, no matter what system you have.

Are you convinced yet? You can head straight to our guide on the best DACs. Want to learn more? Below, we explain how a DAC works and why investing in one is worth your while.

What Does a DAC Do?

Put simply, a digital signal is created by taking an analog sound wave and measuring it at very regular intervals. The waveform is captured more accurately the more precise the amplitude measurements are and the more frequently the measurements are taken. A good DAC is vital for converting these digital readings into an accurate analog wave and thus into the sound you hear.

The sounds we encounter in daily life—traffic, musical instruments, or even a crying baby during your otherwise peaceful commute—are transmitted as sound waves that travel through the air to our ears in a continuously varying analog signal. Analog audio recordings were stored on shellac (and later vinyl) records, and then on magnetic cassette tapes. However, the fragility and unwanted noise of these formats gave way to something new: the compact disc, ushering in the digital sound revolution.

Digital sound uses a completely different approach than analog. Digital music files are typically represented using Pulse Code Modulation (PCM), created by measuring the amplitude of an analog music signal at equal time intervals. The amplitude values are represented as binary numbers (composed of 1s and 0s), and the length of these numbers is often referred to as bit depth. The time intervals for these measurements are called sampling rates.

For instance, when recording a standard compact disc, sampling occurs 44,100 times per second. Each of these samples is measured to a precision of 16 bits, with the results stored in a 16-digit binary format. Thus, “CD-quality” audio refers to recordings that are 16-bit/44.1 kHz.

On the flip side, when recording high-resolution audio, you move up to 24 bits, with sampling rates reaching up to 192,000 times per second, resulting in 24-bit/192 kHz recordings.

Digital audio data can be stored at various sampling rates, bit depths, encoding formats, and compression methods—but no matter how it's done, the DAC's job is to make sense of all this, converting it from binary format as accurately as possible to bring it back as close to the original analog recording as possible.

Why Do I Need a Separate DAC?

Although it's true that nearly every digital device comes with a DAC, it's also true that not all DACs are created equal. For starters, they may not support all file formats and data transfer rates. And, as mentioned earlier, some may simply not do a great job at the conversion process.

Poor-quality converters can introduce unwanted noise during playback due to poorly designed circuits, not to mention adding extra distortion due to jitter. Jitter can best be defined as digital synchronization errors. Accurate synchronization of the digital music stream is vital for high performance, and if this isn’t done properly—usually due to a poorly designed clock circuit—the performance suffers.

Jitter issues can occur whenever a digital signal passes through a printed circuit board, and it becomes particularly problematic when the signal is transmitted between devices. In recent years, we've seen a rise in the popularity of asynchronous DACs, which take on the synchronization functions from any computer they can connect to, precisely for this reason.

Digital clocks built into specialized Hi-Fi DACs are generally more accurate than those used in regular PCs, meaning the overall conversion process is executed much more precisely—especially in the case of the best DACs.

WAV, FLAC, DSD: The Source Material Matters

Of course, to get the most out of a DAC, you need to start with good source material—don’t expect miracles if all you're feeding the converter is a 128 kbps MP3 or Spotify streams. In fact, the most accurate decoding of such compressed signals can make any sound defects even more apparent.

You’ll hear optimal results with CD-quality content or, even better, high-resolution audio, which is often stored in lossless PCM formats like FLAC, WAV or ALAC (Mac), or alternatively, DSD if that's your preference. All audio file formats are explained here, but to sum it up:

DSD, or Direct Stream Digital, is an alternative to PCM and was originally designed for Super Audio CD (SACD)—a format promoted by Sony and Philips in the late '90s and early '00s.

This is a much more niche format, differing from PCM in that it offers a bit depth of just one bit but much higher sampling rates—typically DSD64 at 2.8 MHz and DSD128 at 5.6 MHz. Debates continue over which encoding system is better, but suffice to say, if you firmly align yourself with the DSD camp, it’s worth checking if the DAC you’re considering supports it; most do, but not all.

What Type of DAC is Right for You?

DACs come in all shapes and sizes, offering various levels of input options and functionality, so you'll need to think about how you want to use it, not to mention the budget you have in mind.

Compact DACs with USB or USB-C interfaces provide portability and convenience at a reasonable price. These include USB drives, such as the highly rated DragonFly line from Audioquest, which starts with the five-star Audioquest DragonFly Black and goes up to DragonFly Cobalt. They plug directly into your laptop (or phone via an adapter).

Alternatively, you might opt for a wireless DAC, like the five-star iFi GO Blu, which can connect to your source (but not your headphones) via Bluetooth, eliminating one cable from the equation.

Some of these devices are powered by your computer or phone, so there’s no need for an extra power source, and they generally feature simple connections, typically just with a headphone jack and possibly a line-out for connecting to active speakers or a Hi-Fi system.

If you’re considering upgrading your personal audio system, keep in mind that the performance of good wired headphones with a DAC consistently outshines that of wireless headphones.

If you need more connectivity options and don’t mind carrying a digital-to-analog converter around, a desktop DAC, like the award-winning Chord Mojo 2 (which is actually also quite portable), might be a better fit. While they are generally larger and require their own power source, they often offer multiple additional digital or analog audio inputs alongside the USB input for connecting to your computer. Some, like iFi Zen DAC V3, can be powered by both USB and mains.

Look for a DAC with a built-in headphone amplifier if you want to listen through headphones—most, but not all DACs offer this option. Our award-winning DAC, Chord Qutest, for instance, does not include a headphone amplifier or jacks, as it is designed for integration into a system with speakers, situated between the digital source and amplifier for enhanced performance.

Finally, some digital-to-analog converters are built to work as part of a larger home audio system. They typically have even more inputs—especially more niche connectors like AES/EBU—and potentially more features, such as a volume control, allowing them to also function as a preamplifier.

These will support a full range of high-resolution music formats or have Bluetooth connectivity for wireless streaming from your smartphone or tablet, although both of these offerings are increasingly available in both portable and desktop devices these days. Home DACs generally fall into the higher price segment of the market, so they should deliver superior performance as well.

They can range from reasonable (say, Chord Hugo 2) to extravagant (Chord DAVE), or, if money is truly no object, Nagra HD DAC/MPS. Ready to make a purchase to enhance your portable phone, desktop computer, or home Hi-Fi system? Check out our expert selection of the best DACs in our handy buying guide.

Frequently Asked Questions

• What is the primary function of a DAC? A DAC converts digital audio signals into analog signals, allowing you to hear sound through speakers or headphones.
• Why should I invest in a separate DAC? A standalone DAC can provide better conversion quality compared to built-in DACs, enhancing audio clarity and reducing distortion.
• What types of audio formats should I use with a DAC? You should use lossless formats like FLAC, WAV, or high-resolution audio files for the best sound quality.
• Can I use a portable DAC with my phone? Yes, many portable DACs are designed to connect easily to smartphones for improved audio playback.
• How do I choose the right DAC for my system? Consider your audio needs, portability requirements, and budget when selecting a DAC.

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