How much do you need to spend on a DAC to...

Any dac at about $500 or more will be a major improvement.

My experience has been that almost any external DAC will be an improvement over the headphone output of a Mac.

One good place to start would be with a Musical Fidelity VDAC, either the original or version 2. I use the original VDAC in my office with an iMac and like it a lot.

Teajay - would you know how the Schiit Bifrost compares to the Zdac?

Thanks

As mentioned, it doesn't take a whole lot to do better than the output on the Mac.

I'll add the Emotiva XDA to the list. It's one heck of a bang for the buck. I picked up an XDA-1 when they were clearing them out. I think I paid something like $200 for it. Since I got it, I've also tried a Cambridge Audio DacMagic, a V-DAC and a Bifrost. I wound up returning all three because they did not offer any advantages or benefits in my system. I'm still running the XDA-1. Emotiva is now offering their XDA-2 for something like $399.

Others that you might want to consider in the same price range (although they offer less flexibility) are the Peachtree DacIT, and the Wyred4Sound uDAC. I mention these because these are going to be the next two that I try.

Even a low priced DAC will be better than the output on the pc.