An AV (audio-video) receiver is designed to deliver power to your home theater system, and a DAC (digital-to-analog converter) takes digital content as input and converts it into analog for your system to play it. But how are these two connected? Is DAC a prerequisite for using an AV receiver?

When starting out, you don't need an external DAC for your AC receiver because it already has one. But an external DAC can help if you're hearing background hissing or want to further improve sound quality. Even then, you should eliminate all other sources of distortion before getting a new DAC.

In this article, we'll discuss what DAC is, how it works, its applications, and whether you need one at all. Apart from that, we'll also look at ways to improve sound quality other than getting a new DAC.

What Is a DAC?

Have you ever wondered what goes on inside your audio equipment? How can data on your computer suddenly become sound? Well, you might not know it, but a DAC is doing all the heavy lifting behind the scenes so that you can listen to your favorite songs on Spotify.

DAC stands for digital to analog converter. Sometimes you might also see D2A instead of DAC—it refers to the same device. The name of this equipment speaks for itself. A DAC is a device that converts digital signals into analog signals to amplify and pass them on to speakers or headphones.

When your favorite band plays a song, recording engineers convert those analog signals to a series of numbers that can be stored digitally. CDs, DVDs, computer files are generally used to save digital music. But these files are useless to us unless we convert them back to analog signals. A stream of ones and zeroes is not something you can listen to unless you are crazy… or a robot.

That's why we have to convert digitally stored signals to analog signals. Doing so allows us to listen to music using loudspeakers or a set of headphones.

Wait a minute. You're saying that I need a digital to analog converter to play music on my computer. But I never bought such a device, and I can still play ‘Baby' by Justin Bieber on full volume. What's up with that?

First of all, shame on you. Second of all, anything that can receive a digital signal and output sound must have a DAC built into it. This means computers, mobile phones, TVs, MP3 players, wireless speakers, AV receivers, etc., already include a DAC.

I know your next question is, “If my AV receiver already has a DAC, why would I need a new one?” Let's discuss how a DAC works and why you might want to consider buying an external DAC.

Does DAC Improve Sound Quality?

As we've seen, a DAC is just a device that converts digitally stored data into sound. The DAC built into our computers and other devices is designed only to get the job done. If you have a high-quality DAC, it will handle music files more effectively and produce high-quality sound.

So yes, switching from a built-in DAC to an external one will improve your sound quality.

However, it's important to note that you may not even notice the difference unless you have everything else perfect. And by that, I mean you have an excellent AV receiver, high-quality speakers, matching amplifier, and high-quality music files. These things have a much more impact on sound quality than an external DAC.

Should You Buy a DAC for Your AV Receiver?

If you have a mid-range home theater setup, your AV receiver's built-in DAC will be sufficient. DACs have been around for a long time, and the technology has seen significant development in the last few decades. Today, most mid-level receivers and other electronic sources like computers have decent DACs.

This means you never “need” an external DAC; you will do just fine without it. However, there may be situations where buying a DAC can be justified. But before doing that, you need to make sure you've resolved all other issues affecting your sound quality.

There are mainly only two reasons why you would want an external DAC. The first is if you hear background hissing sound during the quiet sections of the music or if your playback is often disturbed by noise. Even in that case, the underlying issue could be fan noise, hard drives spinning, or a poorly designed layout on the sound card.

You've done everything you can to eliminate noise, but it's still there? Try getting an external DAC and see if that solves the problem.

The second reason for buying a DAC is low sound quality. However, as we'll discuss in the next section, this comes much later than you think. Before you consider changing your DAC, you must take steps to improve other aspects of your sound system.

Bottom line: when you're starting out, you probably don't need a DAC just yet. Even if you're having problems with the system, likely, the issue lies somewhere else. DACs are also not a priority investment for improving audio quality.

Buy a Speaker and an Amplifier First Before a DAC

Buying an external DAC is not the first step to improving the audio quality of your system. Investing in higher-quality speakers will result in much better sound than buying an external DAC. If I was just starting out and wanted to listen to songs in a better way, this is the first step I would take.

Once you've got the best speakers for your room, it's time to choose the best amplifier for your speakers. A mediocre audio amplifier will lower the sound quality of the entire system to its level. It is crucial to have the right amp because it's the heart of the audio system and determines the sound quality.

So you have the best speakers, and you also have the best amp for your speakers. You can now consider buying an entry-level DAC. It's still not the time to go for an expensive DAC; just an entry-level device will do.

After that, you need to change the music streaming service you use. At this point, your tech will be more capable than what's largely available by mainstream services. At the “very high” quality setting, Spotify outputs files at 320Kbps, which is perfectly fine for most purposes. Many people can't even tell the difference, to be honest.

However, if you want to play even better-quality files, you can subscribe to a high-quality music streaming service like Tidal or Amazon Music HD. They allow you to stream lossless FLAC files, which are perfect for your improved setup and hardcore audiophiles of course.

Your room also has an impact on sound quality. But as with other steps mentioned in the article, moderation is the key. You don't need to spend money on hanging acoustic panels on your walls; using rugs and heavy furnishing also makes a noticeable difference.

Final Thoughts

A DAC is an integral part of any audio system. It converts digitally stored files to analog signals for us to hear the music. However, this means any music-playing device must include a DAC for it to function.

Buying an external DAC improves sound quality, but you're unlikely to notice a difference unless you have a high-quality system. The most impactful investments are buying the best speakers and getting the perfect amp for them.

After that, you may consider purchasing a DAC. Before that, it would be a waste of your money because the return on investment is relatively low.