DAC's expensive?
The technology is constantly on the move, so quality per dollar has been quickly improving.
There's a lot to learn about them: upsampling, oversampling, PCM, DSD, DXD, bit sizes (1, 16, 24, 32), and sampling frequencies (44.1 - nearly infinity). But basically CD quality (otherwise known as Redbook) is 16 bit/44,100 Hz sampling and is the bottom audiophile PCM standard (MP3, etc. are lower to save disc space). Anything above that is called Hi-Res. DSD is a spin off from Sony's old SACD standard and is the latest/greatest version of Hi-Res. It comes in a variety of sampling rates too and of course takes more disc space than CD quality too.
Opinions vary, but most recommend budgeting about 10% of your system cost for a DAC. The Dragonfly is currently $100 and is quite decent. The Schiit Loki (DSD) is $150 but only does DSD (software can convert PCM to DSD). Full blown DAC's that do all PCM and DSD varieties start at $850. You can also find combination DAC/pre-amp/headphone amps starting at $500 (PCM) or $1600 (PCM/DSD).