DSD was originally created to have very high resolution with a very very simple DAC, using 1-bit and then passive filter compnents. Most DAC's out there use combination DAC chip, but some have a separate playback DAC just for DSD.
Here's more information on the format:
https://www.whathifi.com/advice/what-dsd-audio-how-it-works-where-to-download-files-and-more