DAC stands for "digital to analog converter" and that's what it does, by converting an optical/coaxial/USB input to an analog signal output to the amplifier. By running USB, optical, or coax into a DAC, you bypass any internal amplification or the like (as my understanding of it is) from your computer's sound card; it's basically nothing but a raw signal output into the DAC. Conversely, if you ran a 1/8" to RCA converter from a headphone jack to a discrete amp, you'd be sending the internally-amplified signal out to the amplifier, instead of a raw signal; this is typically a bad thing.
The Zero can act as a stand-alone DAC for an amp daisy-chained to it, or it can function as a DAC and an amp. For the price, it's not a bad all-in-one combo, but I couldn't comment on it against the Headroom or uDAC2, since I haven't heard either of those. I'm not sure what type of outputs a Macbook has, but you wouldn't be ill-served to buy a DAC/amp combo like the Zero, or a discrete DAC and amplifier combo, like the uDAC and the Little Dot, for the reasons given above.
tl;dr version (was a bit verbose above): a DAC converts a digital output signal from a computer into an analog signal that an amplifier can use.
i dont mean to hijack, but im new to this dac/amp thingy. Im willing to buy a new headset (hd650) but i am very confused what to do next. I have a macbook pro and im confused weither i have to get a DAC or an amp or something that can do both. Is the ZERO a dac and an amp at the same time, meaning that i only have to buy one piece instead of 2 (dac + amp)? Also, whats the better thing to do, get a zero or get a udac2 +little dot mk or get a headroom micro amp?? Sorry but i am SO confused lol!