What's a DAC? And Do I Need One?

I read in Stereophile that putting a "DAC" between my plebian NAD "515" five disc CD changer and my preamp would improve the sound of my CD's dramatically. That it would get this part of my system up to Stereophile "borderline class A". Well, ok, sounds like a good idea, but I'm still new to all this... What is a "DAC"? What will a DAC do and what will it sound like? How would you characterize the difference between the "before & after" of adding a DAC? Most importantly, is this a "tweak" or is it a serious improvement that is worth spending money only? That is, Is this a 5% improvement item or a 50% improvement item? The DAC's listed in Stereophile are very pricey! Before spending that much money, it would be great to hear some opinions of the value of these devices. Also if you have a favorite brand or model, I'd love to know what it is! We have used single bay CD players, but found that the five CD changer is a big convenience when several people are using the same machine. We'd like to maintain that conveniece and improve the sound of our CDs if possible. That is, so long as the improvement is tangible and the DAC is really worth the money. If we are "listening seriously" we usually prefer to put on a record. But, it would be nice to get better noise out of those little silver frisbees! Other than plugging in a couple of CD players, I have very little experience with digital sources and will certainly appreciate your thoughts!! Sincerely, Kurt
DAC= digital to analog converter. All CD players have one. Cheap CD players have cheap (poor sounding) DACs, and expensive CD players (usually) have expensive DACs. Get a DAC from a dealer for audition and try it for yourself. No local dealer? Try Audio Advisor. I run my Sony CA9ES into an excellent Muse model two DAC with excellent results.
Kurt, One of the single most significant changes I made to my system was adding an outboard DAC to my system. Its surprising how poor most of the built-in DACs are. Does your changer have a digital out (RCA or optical)? If so, you can buy a DAC, here on Audiogon starting at $275, and still keep the convenience of your 5 disc changer.
Buy a used Theta DAC. All Theta DACs sound great!!! I have a Cobat A, a Progeny A, a Pro Basic IIIA and two Theta TLC jitter boxes. The sound is extremely clear, lifelike and dynamic. The quality of digital cable also greatly influences the sound. The digital cables from D. H. Labs are a terrific sounding. I have bought several used DACs from people on the internet for half the price of new. Go to thetadigital.com to read about the different models. Then search the ads here, audioweb and ebay for a good deal!
I could sell you my Musical Fidelity X-DAC for $195, I'd pay shipping within the US. It decodes HDCD. It was recommended "Class C" as recently as '98, I think. If you want to spend more, either the Bel Canto DAC-1, or the MSB Link 3 with options, look good to me. I have a Resolution Audio CD-50 CD player I bought used, and it's better than these DAC's (it's about as good as a Levinson 39), but it costs a lot more than the DACs.