Digital-to-analog conversion is a process in which signals having a few (usually two) defined levels or states (digital) are converted into signals having a theoretically infinite number of states (analog). A common example is the processing, by a modem,of computer data into audio-frequency (AF) tones that can be transmitted over a twisted pair telephone line. The circuit that performs this function is a digital-to-analog converter (DAC).
Basically, digital-to-analog conversion is the opposite of analog-to-digital conversion. In most cases, if an analog-to-digital converter (ADC) is placed in a communications circuit after a DAC, the digital signal output is identical to the digital signal input. Also, in most instances when a DAC is placed after an ADC, the analog signal output is identical to the analog signal input.
Binary digital impulses, all by themselves, appear as long strings of ones and zeros, and have no apparent meaning to a human observer. But when a DAC is used to decode the binary digital signals, meaningful output appears. This might be a voice, a picture, a musical tune, or mechanical motion.
Both the DAC and the ADC are of significance in some applications of digital signal processing. The intelligibility or fidelity of an analog signal can often be improved by converting the analog input to digital form using an ADC, then clarifying the digital signal, and finally converting the "cleaned-up" digital impulses back to analog form using an DAC.