A digital to analog converter (DAC) can take a digital or numeric value and convert it into a voltage. Think of a DAC as the opposite or compliment to an analog to digital converter. Instead of reading analog voltage values the DAC will generate voltage values based on a digital or numeric input.
Digital to analog converters are useful when interfacing with some analog components, for example a speaker which plays sound and music. Sound files on your computer are stored as numbers in a digital format but speakers can't 'play' these numbers and instead need a special analog signal of varying voltages to make sound. A digital to analog converter can take digital values like music samples and converts them into voltages and analog signals that can drive a speaker.
MicroPython boards with a built-in DAC are somewhat uncommon. Currently the pyboard is the only board with a built-in DAC, other boards like the ESP8266 do not support a DAC. However you will see on the next page for pulse-width modulation that for boards without a DAC you can sometimes get similar 'digital to analog' capabilities.
Since most MicroPython boards don't have a built-in DAC its usage won't be covered in detail in this guide. For the pyboard consult its DAC documentation for examples of its use.