Considering a DAC and need advise

I own a McIntosh C28 preamp, MC2105 amp, Paradigm V4 Studio speakers, and a Rega P3 phono. I am most likely buying a Rega Planet 2000 (used) and need advise about a good DAC for the money which matches my gear in terms of performance. I really don't fully understand the necessity of a DAC. May I have a concise synopsis as to why this will be so important?
I really don't fully understand the necessity of a DAC

So, then why are you considering one ? Listen to the Rega Planet for a few days before you decide to make changes.....
The Rega Planet has a DAC built-in. It is a CDP, (Compact Disc PLAYER) which means it has a transport and DAC in one chassis. The transport "reads" the digital bitstream from the disc and the DAC "converts" that signal from digital to analog, so we can hear it.

I agree that you should listen to the Rega Planet first, maybe you'll like the sound.
You may or may not gain significant benefit from a separate dac. Use the cd player without a separate dac for a while, see how you like it, and perhaps try to obtain and evaluate a separate dac on a no-obligation trial basis.

The possible benefits of a separate dac include:

-- It MIGHT provide better sound quality than the built-in one, depending on their respective quality and on system synergy.
-- The ability to use it with other digital sources, some dac's providing usb inputs which can be fed from computers, for instance.
-- If the laser assembly or some other part in the transport section of the cd player were to fail, you would just have to purchase a new transport (or a new but inexpensive player to use as a transport), instead of replacing a presumably more expensive self-contained player.

A downside of having a separate dac is the possibility of jitter being introduced in the digital signal at the interface between the two units. Some dac's have sophisticated jitter rejection provisions, and some don't. If you choose one that does (such as the Benchmark units), you would likely get excellent results even with a very inexpensive player or transport.

Hope that helps,
-- Al
Thank you for the responses. I hope to pick up the Rega Planet 2000 this week and will see how it sounds.
as the other respondents have opined, there's no compelling need to get a separate dac if you're buying a rega planet, which has a superior inboard dac. if you like the idea of more gear (and who doesn't)you might consider getting a cheaper player to use as a transport (e.g a cambridge 540 or garden-variety nad) and buying a separate dac, such as the cambridge dacmagic; however it's a matter of opinion as to whether this will give better performance than just the rega.