This is a repost by me from another thread:
https://www.head-fi.org/threads/1-week-review-of-sony-nw-zx507-nw-zx500-series.921418/
Regarding Sony's No / Unknown "DAC", it is incorrect to say that Sony has no DAC as all digital audio players must have a DAC inside in order to convert binary data into analog sound.
How Sony does the conversion is different from other daps that rely on semiconductor dac chips from Analog Devices, Asahi Kasei Microdevices, ESS, Texas Instruments or Cirrus Logic to do the "dirty work".
Sony does all in one digital signal processing, digital to analog conversion, digital volume control and class D amplification completely within their S-Master HX chip. This technology is Sony proprietary(only on sony devices).
It has the advantage of high quality sound as all the processing and conversion is done in a single chip which reduces electrical interferences and jitter.
It also has the advantage of lower power consumption and lower heat output as compared to other digital audio player that rely on discrete dacs and external amplifications chips.
The disadvantage is the power output of the amplification limited to 250mW(200mW for ZX507) on balanced due to the limitations of semiconductor technology.