What do ADC and DAC stand for?
Why ADC and DAC are required
In the AV world, the signal being converted with an ADC or a DAC is audio. Existing commercial AV or home entertainment systems change and develop over time. Certain components in the system may be added or replaced if they get damaged or become outdated. This can result in a mixture of both analogue and digital devices in one system.
For example, a wide variety of audio amplifiers from commercial PA amplifiers to high end Hi-Fi amplifiers use traditional analogue technology because of the pure uncompressed sound it is going to produce. Also, audio systems that feature older technology devices are most likely to be analogue (e.g. a turntable of a cassette deck).
Latest generation AV devices are digital (e.g. Blu-ray players, MP3s, Sky TV and streaming devices). Therefore, when integrating analogue signal into a digital AV system an ADC is needed and when integrating digital signal into an analogue system a DAC is required.