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A DAC is an abbreviation of a Digital-to-Analog Converter. It is intended to transform digital signal of audio sound into analog one to be transferred by a headphone amp.
Usually headphones and a DAC are connected through an amp that serves a mediator.

DAC examples

One of the most common examples of a DAC is USB in a computer. The most popular DAC connection method is via USB from a computer. CD/DVD players and other audio devices provide SPDIF.

Analog audio signal

First of all, let’s see what an analog audio signal is. An analog audio signal is a voltage that continuously varies and transforms into the sound wave that you hear.
Let’s look at the example of a sound chain starting with a microphone that perceives incoming sounds and converts them into analog electrical signals, then the speakers transform them back into the original sound.

The function of a DAC

There are many examples of audio reproduction and the way they are stored and converted. But in all of them the last steps belong to the process of conversion of digital numbers that store on the audio sources into an analog electrical signal that is transmitted to a headphone amp, and then to headphones. This process is the work of a DAC – a digital analog converter.