Do I need a DAC to go from computer to integrated

Yeah you pretty much do. You need something to convert the digital to analog. You can either:

1. get a USB DAC, which are spouting up everywhere,
2. get some kind of computer soundcard (internal or external), or,
3. a USB to S/PDIF converter that can then be connected to any DAC that has
S/PDIF input (which most do).