Many of my readers keep asking me to quantify the actual differences between DACs and whether it makes sense to shell out big bucks for an expensive DAC.

That’s a surprisingly difficult question to answer.

I’ve owned, tested and compared everything from extremely cheap USB DACs to products costing several thousand Euros. Over the years, I’ve also changed my own opinion quite a bit.

So let’s get rid of some common myths without the usual audio BS.

Myth #1: “You need a DAC”

No, you don’t.

Here’s where consumers are often misled. Every digital playback device that provides an analog output already contains a DAC. Your smartphone, tablet, laptop, CD player and television all have one.

Well-engineered smartphones such as Apple’s iPhone and Samsung’s Galaxy series have long used very capable digital audio architectures. A cheap integrated DAC implementation is not automatically bad just because it sits inside a phone instead of a heavy aluminum box with an audiophile brand name on the front.

I learned this lesson in a rather funny way.

At a Head-Fi meet, I had brought along my STAX (advertisement link) headphones and amplifier but used an iPad directly as my source. An exhibitor who owned an expensive NAIM DAC listened to my setup and asked where my DAC was.

He was genuinely surprised when I showed him the iPad.

The little Apple device was simply feeding the system from its analog output. No expensive outboard converter, exotic USB interface or oversized power supply was involved.

Did that mean the iPad was the world’s best DAC? Of course not.

But the system still sounded excellent, and the source clearly wasn’t the disaster many audiophiles would expect from a tablet. With a revealing setup such as my STAX electrostatic headphone system, a truly poor source would have been pretty obvious.

A better DAC may give you slightly more resolution, realism or spatial information. But it’s not like comparing a gramophone to a reel-to-reel master tape.

You’d probably enjoy your favorite music just as much if the expensive DAC disappeared and you were left with the iPad.

NAIM is a great company with some fantastic products. That’s not the point. The lesson for me was simply that an external DAC isn’t automatically necessary just because an audiophile system is expensive.

Myth #2: “Outboard DACs will always improve the sound of your setup”

Not necessarily.

Let’s first examine how an audio signal travels to an external digital-to-analog converter.

Your computer, streamer or other digital source sends digital data through USB, optical, coaxial or another digital interface. The DAC receives that data, converts it to an analog voltage and passes the result to your amplifier.

Moving the DAC into a separate enclosure can have advantages.

An expensive external DAC is potentially better shielded against electrical noise, may have a more sophisticated analog output stage, a better-designed power supply and an implementation that allows the converter chip to perform closer to the manufacturer’s specifications.

None of that is a guarantee, though.

A well-designed internal DAC may already be extremely quiet and transparent. Connecting another box to it does not magically create information that wasn’t present before.

This is particularly relevant with modern integrated amplifiers, streamers and active speakers. If their internal conversion is already competent, an external DAC can simply give you another device, more cables and another power supply without producing a meaningful sonic benefit.

There are still good reasons to buy one: better connectivity, balanced outputs, volume control, a headphone amplifier, DSP, USB compatibility or simply because your existing device does not have a suitable analog output.

Just don’t assume that “external” automatically means “better.”

Myth #3: “There’s a huge difference between cheap and expensive DACs”

Yes, there are noticeable differences.

But the differences aren’t only in the sonic department, and they are usually much smaller than changing your headphones, loudspeakers or room acoustics.

This is something I’ve learned repeatedly.

My little SMSL M8 cost only a few hundred Euros, yet it came surprisingly close to a much more expensive Ayre DAC when I compared them through a very revealing STAX (advertisement link) system.

I later moved to the Gustard X20u. The Gustard was better to my ears and offered a more ambitious balanced design, substantial power supplies, better connectivity and variable output. But even then, we were talking about relatively small differences in the grand scheme of an audio system.

More money can buy you better engineering, lower noise, a more capable analog output stage, better construction and a lot more functionality. Whether those improvements translate into an audible difference — and how large that difference is — depends heavily on the rest of the system.

The feature differences can actually be much more important than the sound differences.

More expensive DACs may provide:

Balanced XLR outputs
Remote-controlled volume
Several digital inputs
Better headphone amplifiers
Parametric EQ and DSP
Professional digital interfaces
Analog inputs
Analog-to-digital conversion
Better displays and controls
More flexible gain and output-level settings

A good example from my own system: I eventually bought an RME ADI-2 Pro FS R specifically because I wanted to connect my phono stage and experiment with digitizing vinyl. That meant I needed analog inputs and a high-quality ADC in addition to the usual digital inputs — something the Gustard simply didn’t have. The RME also happened to bring DSP, extensive level control and excellent conventional headphone outputs along with it.

The standard RME ADI-2 DAC should not be confused with the Pro model here: it is primarily a playback-oriented DAC and does not offer the same analog-input and AD-conversion functionality.

Years later, the Eversolo DMP-A8 replaced the RME because I wanted something different again: integrated streaming, local music storage, DAC and preamp functionality, plus an analog path for my turntable.

The previous DAC hadn’t suddenly gone bad in either case.

The devices simply solved different problems.

If any of those additional features are beneficial in your setup, you may want to consider a more expensive DAC. After all, “expensive” is relative.

A 1000-Euro DAC that replaces a streamer, preamp, headphone amplifier and several other boxes can actually be better value than a 300-Euro DAC that forces you to buy all those things separately.

Myth #4: “Device XYZ measures better, therefore it sounds better”

This is another area where things get complicated.

Manufacturers love quoting signal-to-noise ratios, dynamic range, distortion figures and the specifications of whatever ESS, AKM or other DAC chip happens to be fashionable.

These specs alone are largely meaningless when evaluating sound quality.

A converter chip does not operate by itself. Power supplies, clocking, PCB layout, grounding, the analog output stage and the complete implementation all matter.

If implemented correctly, a cheaper DAC chip can easily outperform a more expensive chip surrounded by a badly designed circuit.

And once distortion and noise are already below audible thresholds, making the number on the specification sheet even smaller does not necessarily create an audible improvement.

A DAC measuring -120 dB distortion instead of -110 dB may look dramatically better on a chart. That does not mean you’ll suddenly hear a wider soundstage or more realistic saxophones.

Don’t misunderstand me: measurements are extremely useful.

They can expose noise, distortion, clipping, poor channel balance, jitter-related problems and other genuine engineering faults. I’d much rather buy a product that measures properly than one whose manufacturer hides behind vague descriptions of “musicality.”

But measurements need context.

A single number cannot tell you whether you’ll prefer one competently designed DAC over another.

It also takes a giant leap in system performance before increasingly tiny DAC differences become important. If you’re listening through mediocre headphones or badly positioned loudspeakers, replacing a competent DAC with a reference-class converter is probably one of the least effective upgrades you can make.

Get the fundamentals right first.

So When Does an Expensive DAC Make Sense?

I don’t want this article to sound like I’m telling everyone to use the headphone jack of an old tablet forever.

I have owned expensive DACs myself and still use high-quality digital equipment.

The point is to spend money where it actually improves your system.

An expensive DAC makes sense to me when you need the functionality or engineering that comes with it.

Maybe you need balanced outputs because you’re running long cables. Maybe you want an excellent headphone amplifier, parametric EQ or precise volume control. Maybe you need analog inputs, an ADC, professional digital interfaces or integrated streaming.

Build quality matters, too.

A well-made component with a good display, reliable controls, proper connectors and long-term manufacturer support can be worth paying for even when the audible difference from a cheaper DAC is small.

What I would not do is spend several thousand Euros simply because I expect a proportional increase in sound quality.

Digital audio doesn’t work like that.

Where I Would Spend the Money First

If your budget is limited, I’d still put the money into headphones, loudspeakers and room acoustics first.

The difference between a 200-Euro headphone and a genuinely great 1000-Euro headphone can be enormous.

The difference between two competent DACs at those same price points is usually much smaller.

The same applies to loudspeakers. Their interaction with your room changes frequency response, imaging, bass and tonal balance far more dramatically than switching between two well-designed modern converters.

DACs still matter. They just belong lower on the priority list than most people assume.

For current buying recommendations, take a look at my DAC Buyer’s Guide.

Looking Back in 2026

I originally wrote this article years ago, and after owning everything from the SMSL M8 and Gustard X20u to the RME ADI-2 Pro and Eversolo DMP-A8, my basic conclusion hasn’t changed very much.

Good DACs can sound different. I’ve preferred some over others in my own system, and I’m not going to pretend those experiences didn’t happen.

But the differences have rarely been proportional to price.

What has changed is what I value when I spend more money.

Today, I’m much more interested in functionality, connectivity, analog stages, reliable volume control, DSP, headphone amplification, streaming, software support and overall system integration than in chasing tiny differences between already competent converter chips.

The SMSL M8 first made me question how much DAC sound quality actually costs. The Gustard X20u showed me that an ambitious Chinese DAC could compete with equipment carrying much more prestigious names. The RME taught me how useful professional features and an ADC could be. And the Eversolo eventually showed me how much I value having several of those functions integrated into one device.

So my advice remains pretty simple:

Buy a DAC that is technically competent and gives you the features your system actually needs. Then stop worrying about the DAC and listen to music.

Last updated: August 2026. The original myth-based structure and personal experiences in this article have deliberately been retained. Some technical wording has been clarified and links have been added to my later long-term reviews.