What is a DAC, and why do I need one?

you probably ment to say "digital to analog converter"
:)

fwiw...
the DAC is the single most important piece of listening to digital music reproduction.
there is a lot of data in these CDs we listen to. A lot of great music and ambience...but you'll never hear it w/o *excellent* digital to analog conversion.

a good DAC squeezes the most out of your music and is well worth the price of admission.

Does you cd player have a digital out?If yes I would definetely get a used dac.Even Audio Alchemy for low$$$.

benchmark DAC-1
Grace (new) 902

hard to beat.