DAC = digital-to-analog converter.
The iPod has one of these inside it already. The iPod's DAC takes the digital signal from the iPod's storage (hard disc or RAM) and converts it into an analog signal which can be sent to headphones.
A good DAC is hard to find in the mass market.
One way to improve an iPod's sound is to take the digital signal and send it to a different and better DAC, an external one. That avoids the so-so DAC inside the iPod. Then this higher-quality analog signal can be sent to a preamp.
Unfortunately, it is hard to get that digital signal out of the iPod. Both the signal from the headphone jack and the signal from the dock connector have already gone through internal processing and degraded somewhat. So a technician has to go into the case and install a new connection at a point in front of the processors (the DAC). That obviously costs money, but if it is properly done you can use an external DAC with your iPod.
The iPod has one of these inside it already. The iPod's DAC takes the digital signal from the iPod's storage (hard disc or RAM) and converts it into an analog signal which can be sent to headphones.
A good DAC is hard to find in the mass market.
One way to improve an iPod's sound is to take the digital signal and send it to a different and better DAC, an external one. That avoids the so-so DAC inside the iPod. Then this higher-quality analog signal can be sent to a preamp.
Unfortunately, it is hard to get that digital signal out of the iPod. Both the signal from the headphone jack and the signal from the dock connector have already gone through internal processing and degraded somewhat. So a technician has to go into the case and install a new connection at a point in front of the processors (the DAC). That obviously costs money, but if it is properly done you can use an external DAC with your iPod.