DAC only works for computers, like a sound card and actually u already answer the question about it.
Amp or amplifier what it does is amplify the signal of ur player (ipod, gumstick, sony mp3 player, cd player etc) to make it better. Mostly amp is an option because like gumstick, its already equip with class A inside it but most of us still use amp to give it more details/bass or maximise the sound.
Its an option really, like for eg. Fiio E5 does boost the bass and tighten the details a tad better than using it without unamp. Anyways, i suggest u audition it for urself to experience it, as my word is just a mere personal thoughts and my personal experince

SHP 2700, 8500, 8900 urmm..for me...shp 2700 is worth the money u invest as long as u don itchy later wanna change..if u itchy also..its not that expensive as d other two..hehe...n i think it has quite nice bass..n deatils also good act any headphone or iems as long diamond in diomond out same goes to . feed rubbish rubbish out..lol

my 2 cents

DAC
its job is to 'convert' digital signals (0101010101010101) from the hard drive and change it to 'analog' (electrical signals) for your headphone or your speaker to emit sound... A DAC can usually be found on PC soundcard and CD players... Without it, there is no way you can hear your music...

AMP
like its abbreviation, an amplifier (AMP), amplify the analog signal to allow greater volume and sound pressure. Since it amplifies the 'wavy electrical signals' (or analog), on several occasion, tiny details that usually is 'dimmed' or 'hidden' can be heard a lot with greater accuracy...

I wont be going into details since this is not the appropriate thread, but to give an simple example, the above mentioned is important when selecting your gear to allow 'better' pairing with your headphones.

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Added on November 10, 2010, 1:47 am

First bolded reply
-It doesn't mean anything special, its just marketing statement.

Second bolded reply
-'Improvement' over sonic qualities doesn't really depends on brand and price. It depends on a whole lot more, but yet, Sonic Gear are not the kinda of brand you can trust your ears on.

Third bolded reply
- Here you are : Philips Headphone Discussion

Below RM200, Philips sure as hell is able to trade punches with other 'big' names in the headphone game.

If if have some spare change to dispose of, I wouldn't mind asking Davis to send me one of these...heard raves reviews regarding them

If you can find the Philips SHP8900 for a cheaper price (than what we find on forums) please let me know cos I am considering buying either Philips or Sony headphones. Too much hype already in headphones as some of the asking prices are in excess of $1K. I do believe Philips or Sony technology can match with some of these ridiculously expensive hyped up brands!
Thanks.

wow! I read some good review about the Sonicgear HP600, maybe I should just buy that and save some money at the same time!