DAC OR NO DAC???

I am a newbie here and just getting into hifi and I am sure this is a dumb question but if anyone can comment and help me out?

I am currently listening to a lot of youtube music videos(quality varies) and tidal from my hp laptop via hdmi connect to a marrantz 7704. the 7704 seems to be decoding the signal pretty well. I tried a audioquest dragonfly red and it gave me some interference or something. ( maybe I needed the jitterbug to go with it?) so I returned it and just using the hdmi. Happy with tidal also but really like the music videos. One question is hdmi sound quality not as good as I could get? Can a dac help from this source? a dac to try that uses an hdmi? or should I just forget hdmi? A dac to try for under 500 or should I just wait and spend more? Thanks

My startup system consists of bw 804 d3's ( I do see where people say they are a little bright but so far I am enjoying them:) Marantz 7704, McIntosh mc207, bw 805d3 and htm1d3 for movies, fathom 212 that I turn up for movies and back down for music, source as described above and audio technical at lp5 ( I know it is a cheaper one but wasn't sure how much vinyl I would listen to but I am impressed with the quality of the new vinyl and sound I am currently getting compared to digital) -room 13 x 15 no acoustic treatments yet