Every device that plays digital audio has a DAC: your phone, laptop, audio interface, and dedicated DAC/amp units. The DAC reads the digital audio stream (a sequence of amplitude values at the sample rate) and reconstructs an analog waveform through a reconstruction filter.
DAC quality matters: a poor DAC adds noise, distortion, and jitter. Most modern DACs (even in phones) are transparent — the audible differences between competent DACs are vanishingly small. Spending more on a DAC than on headphones/speakers is usually the wrong priority.