Every digital audio device with an analog output is equipped with a DAC. DAC stands for Digital Analog Converter. As its name clearly suggests, its function is to convert digital audio signals into analog signals. In most consumer products this is done by a chip that is integrated into the circuitry of the audio device, but for high-end HiFi systems, a stand-alone DAC is needed since they are specially designed to convert digital to analog signals in the most natural way. They can also be the central point in your audio setup. When you are going to buy a DAC be sure to know exactly which one you need: a stereo or a surround DAC. It is also important to keep in mind which formats the DAC should be able to convert to because there is, for example, a big difference between PCM files and DSD files. Not every DAC can handle high sample rates but most of them are able to handle 192 kHz. When you are only going to listen to CDs, however, you probably don’t need a DAC that reaches 192 kHz.