Overview
A DAC converts an abstract finite-precision number (usually a fixed-point binary number) into a physical quantity (e.g., a voltage or a pressure). In particular, DACs are often used to convert finite-precision time series data to a continually varying physical signal.
A typical DAC converts the abstract numbers into a concrete sequence of impulses that are then processed by a reconstruction filter using some form of interpolation to fill in data between the impulses. Other DAC methods (e.g., methods based on delta-sigma modulation) produce a pulse-density modulated signal that can then be filtered in a similar way to produce a smoothly varying signal.
As per the Nyquist–Shannon sampling theorem, a DAC can reconstruct the original signal from the sampled data provided that its bandwidth meets certain requirements (e.g., a baseband signal with bandwidth less than the Nyquist frequency). Digital sampling introduces quantization error that manifests as low-level noise added to the reconstructed signal.
Read more about this topic: Digital-to-analog Converter