How much does a DAC do the more expensive it is?

If it takes a controlled listening test to determine if a difference exists, then the hunt is over.  You will know when you hear a difference.  The confusion starts when the person next to you doesn’t hear a difference.  (In my case my wife).  Who is right?  Both are right.

When you find the right DAC, it will not be about lack of coloration or smoothness.  It will not be about speed or openness or lack of sibilance.  It will not be about resolution and detail that brings out the sound of the singers lips touching or being able to feel the size of the room that the performers are in because you can hear the faint echoes off of the walls or the stage.  It will not be about the drums so clear and sharp that they make you jump or the feathery light shimmer of the cymbals that give you chills and make you long for the feeling to never stop.  The right DAC will make the music connect to you on more than an emotional level.  That one in 10 songs where the music will wrap around your soul and each heartbeat will pause, just momentarily waiting for that next beat in the music.  When you find that DAC, it will be like the gem you have been searching for your whole life and once you find it you simply gaze into that gem and it fills you with euphoria.  When you find the right DAC, it will not be about measurements, it will not be about cost.  It will be like that gem.

Gee, I'm such a poet and didn't know it.  We have a wide cross section of experience on these forums.  I think the wisdom of the wise is often passed over by the newer hobbyists here.  No problem, we all tend to do that.  Audio can be very personal and we each have to try and learn for ourselves.  It's not uncommon to enter this hobby focused on measurements.  We must.  We need something to ground ourselves as we sort out the bewildering amount of options.  So Watts/channel and THD are of primary concern.  Eventually, like a master craftsman, we go beyond measurements and learn to feel what is right.  Someone well experienced in audio can dial in a phono cartridge beyond what can be measured with a ruler.  An experienced person can position speakers in a room without a tape measure.  That person can find the right spots for the speakers knowing exactly when it feels right.  Go measure the speakers and don't be surprised if they are together within 1/8" from the walls.  And if one speaker is a 1/2" different from the wall vs the other speaker, you might feel compelled to move it.  And suddenly the magic is gone.  Hopefully you are able to put it back exactly where it was.

I have a great analog rig.  I used to listen mostly to records until I found my "gem" DAC a couple of years ago.  Partly laziness but also having a much larger library of music to choose from I listen to digital 2:1 over analog these days.  Digital has come a long way this last decade.  CDs started sounding better to me by the mid 1990s but still lacked much of a 3D soundstage and the musicians seemed like cardboard cutouts where analog creates a deep and wide holographic soundstage.  These days digital is on par with analog- at least on my rig in creating a large holographic soundstage.

It's not so hard breaking sound down into bits and building it back again.  Take, for example the light bulb.  A battery powered light bulb compared to a 120VAC power light bulb looks the same to us.  Yet the 120 VAC bulb is flickering at 60 Hz.  Now consider the LED light source using 120 VAC.  It's not flickering at 60 Hz, it is turning on and off, almost a square wave at 60 Hz and yet we still do not notice a difference.  Kind of an analogy.  I could imagine if Thomas Edison were alive today he would be championing his classic vacuum light bulb as superior over LED just as he fought Tesla and Westinghouse as they developed AC electric power.  Edison was a proponent of DC electric power and had made a considerable investment in DC power distribution by the turn of the 20th Century.

Young people these days may never experience a true 24 frames per second film projected onto a screen.  I'm not sure film movie theaters still exist, maybe they do. I know we still see 24 fps films on our digital TVs but it's not the same.  I missed the warmth and flicker of the movie film for a while but now I prefer the smoother 30 and 60 Hz refresh rates.

Technology changes and we move on.  The next generation will have no idea the pleasure of a stick shift and the roar of a loud gasoline engine.  They will see the cars of yesteryear as uncomfortable looking dangerous death traps.  Cars have come a long way from making long trips hot, boring and dangerous to being safe and entertaining.  The digital engineers will figure it out.  Digital sound will continue to improve.  The vinyl LP is approaching 100 years- just a decade and a half to go.  Like the Edison light bulb, it has had a great run.  Times are a changing.

So many here seem to be fixated on cost rather than value when it comes to DACs.  Value can be difficult to determine when it comes to DACs since the technology is not as mature as vinyl, tape, speakers or amplification.  I don’t see vintage 30 year old DACs going for big money.  Changes in digital technology appear to be leveling off, but who knows until we look back 10 years from now.  Still, many DACs have more value than others.  It is not just about cost.  Performance, reliability, adaptability and pedigree (well known manufacturers) affect market value both as a new and as a used unit.

Someone may purchase an $1100 DAC and be pleased as punch with the sound.  After comparing some $600 DACs and $2500 DACs this purchase seems to be the best all around choice without breaking the bank.  In 5-10 years this DAC might resale for $50-$100.  Another person found his ideal DAC and paid $11,000.  This DAC, from a well known brand- and that certainly adds a little to the cost has a beautiful sound with a large airy soundstage befitting the rest of his high end stereo system.  In 5-10 years this DAC will likely fetch $5000 on the used market, baring any new significant technological breakthroughs.  Remember, high end turntables were selling for very reasonable prices on the used market from the late 1990s to about 2010.  Wish I had jumped on my dream turntable back then.  Point is that both DACs have a cost of ownership and that is the thing to consider.  So now, the person who snatches up the $11,000 DAC used will likely enjoy his purchase immensely with potentially a lower cost of ownership than the person who bought the $1100 DAC new.   And if that is the case is there really any debate needed about the sound quality expensive DACs vs inexpensive DACs?  (Other than someone must pony up the price for new gear.)

You missed my point. The person who buys the $11,000 DAC used enjoys a lower cost of ownership vs the person who bought the $1100 DAC new.

The original owner took the depreciation hit.  The 2nd owner can likely sell the $11,000 DAC for about what he paid for it ($5000 hypothetically)- if he holds it for just a few years.  For example, I have owned two vintage ARC preamps, one for 13 years and one for 20 years.  I sold each preamp for more than I paid.  So my cost of ownership was negative, not accounting for inflation.  I enjoyed great hifi sound from my preamps with no depreciation.  Unfortunately, I am not always so lucky.

I have never owned one. But I have played extraordinary recordings on my more modest system, and they have also sounded extraordinary.

Exactly, and that is all that matters.

The one thing no one has mentioned (as far as I have read) is service and support after the sale.  Good customer support and service is a hallmark of the high end hifi industry.  It has a lot to do with good gear keeping its resale value because people know certain brands are still supported years after the original sale.  That service can also include in home setup and adjustments from specially trained individuals.  A lot to be said for good customer service.  We Americans have grown accustomed to seeking out the best deal so much that now we have to pay for service and support after the sale.  Apple, Best Buy, et al have set up a nice side income with their monthly payment plans for warranty support.  So for those looking solely at the bottom line point of sale, they prefer to spin the roulette wheel in hopes that their new component never fails.  The other problem is that many things we buy today are no longer supported after just a few years.

I'd love to see the look on my grandparents faces if I could have told them that one day people would pay $1500 or more for a telephone and then throw it away in just a couple of years as it becomes obsolete.  Not to mention the $17/month extended warranty fee.  We have given away so much with respect to customer service.