All standalone CD players have a Digital-to-Analog Converter built in. However, some high-end players separate the functions into a 'transport' and a 'DAC'. In that case the transport is just that - only the transport and laser assembly, with the digital data stream going to the seperate DAC box via a cable. Some standalone CD players have a 'digital out' where you can hook up another DAC to maybe improve your sound. If you are listening to CD's already, and are happy with the sound, then thats all you need.