Do I need a dac

If you are still searching for a "better sound," you should attempt to understand what you need from your system that is missing. You may spend a lot of $$$ on a "better" DAC, but still not get the result you are listening for. It is impossible to make any further comment, you have to drive forward your pursuit of the sound you want.  

Excuse me but what you've done is put a quality revealing component in front of your Lumin, so it's doing it's job and revealing all the faults of your Lumin.

Upgrading your DAC won't change the quality of sound you're getting from the Lumin, it maybe even make it worse.

Maybe some streaming gizmos may help but eventually you'll need to upgrade the Lumin if you want better sound.

the t2 has a fabulous dac built in 

if you want a differentsound then change the sound by getting a different dac

or try a different dac/streamer

or try to tune the t2

you can try the lumins dsd conversion tab in options

if you need setup or tunning advice on a lumin please contact our store

Dave and Troy

Audio intellect NJ

lumin dealers

If external DACs quality and specs will be at least like your T2 internal DAC or better, SQ will improve.

Hello, 

The T2 is really great and great for the money as long as you use the internal DAC. 
The only thing I would suggest is a linear power supply. If you are out of warranty you can use a $400 SBooster. If in warranty you would void the warranty if using a LPS from a third party like SBooster. It makes a big difference. If you are willing to try a different preamp then Lumin just released the P1. It is an all in one preamp, DAC, and streamer with a LPS already built in. Plus, they say the sound beats ghe T2 and almost as good as the Lumin X1. I am in line to do an at hone demo. This store in the Chicagoland area is a Lumin/ SBOOSTER dealer. You can even demo the LPS for the T2 in your home. 
holmaudio.com

I think you would be good either way. I hope this helped.