How much does a DAC do the more expensive it is?

So what do those much more expensive DACS do for sound?

I like the analogy that a DAC is like a cart. DACs shape the sound. They can smooth out edgy highs, preserve the all important mid-range and tighten up bass. but...EVERYTHING matters.

2 months ago I thought my $600 Bluesound Node (current model) was pretty darn good, and I was also a digital cable naysayer. 

Out of necessity, I upgraded and tweaked my digital front end (details in my virtual system). I still have the Node but I will replace it at some point now that I know what I know:)

You get what you pay for but if you are patient and do your research, a killer digital front end can be had for under $5K. But if money is no object...go nuts.

the primary criteria for what a DAC should do well is to make digital sound analogue. 

Aside from the fact that by definition, this is what a DAC does, it is precisely my benchmark. But what if you don't have a good analogue front end to compare it against?

equating price w sound quality in audioland is a serious mistake

100%, as several others have also pointed out. 

Price is what you pay. Value is what you get.

I believe that is a Warren Buffet quote. Shop wisely.