No, you don't need a DAC for 2-channel. You can simply run the left and right channel audio outputs to the stereo inputs of an amplifier. I don't think you'd even need a preamp because the cable boxes have a volume control.
If you want to go multi-channel then you take the SPDIF digital output from the cable box and run it into the digital audio input of a surround processor or multi-channel receiver.
If you want to go multi-channel then you take the SPDIF digital output from the cable box and run it into the digital audio input of a surround processor or multi-channel receiver.