Digital to Analog Convertors (DAC) are essential in today's digital world of MP3 and other music files. The main purpose of the DAC is to change the digital data (like an MP3) into an analog signal that can then be output to an amplifier.
All digital playback devices have built-in DACs and as you can imagine, quite a few of these are not up to doing the absolute best job. This is why there is a growing market in stand-alone DACs.
It is in the headphone market where we see the largest market for stand-alone DACs. These usually also incorporate a headphone amplifier all in the same unit.
Some of the most popular brands include Arcam, Meridian, Asus and Chord.