DAC is short for Digital – to – Analog Converter. It is an electronic processor inside digital media players that converts digital audio information (comprised of a series of 0s and 1s) into an analog audio signal that can be sent to headphones, or for better sound, to a headphone amp. For it to sound as good as when the music was originally recorded, you need to use a high quality DAC. The simplest way to get a digital audio signal to an external DAC is via the USB port on your computer, or get a digital feed from the optical and coaxial outputs -- also known as SPDiF connections -- found on CD or DVD players, MAC computers, home theatre/stereo receivers, and other streaming audio gadgets of all kinds.