DAC
What is DAC? In its simplest form its a MP3 converter, a way of taking your digital audio and upscaling it to a higher sound quality. Officially, it's a Digital to Analog Converter (or Analogue for we Aussies), and it's a great way to hear your digital music from your iPod, MP3 player, CD player or sound card in a whole new way.
Whether the DAC is inbuilt into the system, or a stand-alone component, you'll find it an indespensible addition to your audio set-up, no matter if it's a home theatre, simple iPod Speaker Dock or full blown hi fi.
What to look for when buying a DAC:
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Bit resolution. The higher the resolution, the better quality the sound. An 8 bit DAC can reproduce 256 levels (28), whereas a 24 bit DAC can reproduce 16,777,216 levels (224).
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Sampling frequency. Again, the higher the speed that the DAC can sample the signal, the better the reproduction.
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THD+N. This is the opposite - you want the lowest number possible here, as this is an indication of the distortion / noise that the DAC introduces to the audio signal
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