Originally Posted by DJScope
The ironic thing about that is you do have a DAC, you probably have several of them! You cannot listen to digital audio files without a DAC (digital to analogue converter). Your PC, phone, tablet and even TV has one. The trick is to have a decent DAC. Most devices suffer from having a bad amplifier and no line out to bypass that amplifier. This is why you would buy a separate DAC which allows you to use your own amplifier, or amplifiers, as you wish. Usually the difference between different good DACs is not audible, this is why most people say the one DAC is really all you need. Which I absolutely agree. I bought the E17 because it kills two birds with one stone, that is having a good DAC and having a good dual amp setup. But you can have them separate, but this makes it not very portable when you are forced to carry around 3 devices to get decent audio.
So, if I understand correctly, a standalone DAC, or a DAC/Amp combo, will connect to the source's digital output (usually USB, right?), and then convert the signal to analog, while doing it better than the source's inbuilt DAC. It also has the ability to send commands back to the source, like music controls.
To sum up, if you are used to a particular sound signature, and wish to keep it across your devices (the ones that allow for the DAC to be connected to anyways), you should get a DAC. This leads me to another question: Is is possible to connect a DAC to any kind of source?