What is it and how does it differ from an amp? Also how do I know if I need one?
What is a DAC?
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DAC -Digital to Analog Converter.
Audio today is stored in a digital format (zeros & ones) and processed in digital, amplifiers and ears are analog (wave).
A digital audio signal need to be changed to analog audio signal, before it can be send thru amplification and/or headphone jack or to speakers.
After audio has finnished processing to analog, it is not strong enough to affect the diaphragm in the headphone (or speaker).
The amplifier increase the signal strength to were it it can make the diaphragm move to create audio that we can hear.
DAC are in anything that deals with a digital audio signal and need to output audio,
So DACs are in TVs, stereos, cell phones, mp3 players, sound cards, etc.
Not for music, but you would need a sound card for surround sound for movies and some games.
You can still watch movies & plays games in 2-channel stereo.