DAC stands for Digital to Analog Converter. Sometimes people call them Digital Audio Converters, too. DAC’s are inside almost any device that holds or receives a digital file and has to convert it into sound.
Our ears can’t actually hear digital music. It has to be converted into analog sine waves that speakers can play first. Your computer, your phone, your TV; all of these and more have DAC’s. Not very good DAC’s, but they have them. That’s why we make external DAC amplifiers. Think of them as high definition external sound cards.