Yes, using a DAC will improve the sound quite a bit.
What kind of computer do you have? Depending on what kind of outputs it has determines what DAC options you can consider.
What kind of McIntosh component are you connecting it to? Analog preamplifier or digital processor? Digital processors have DACs, and some are fairly good.
Make sure you do not rip and archive your music in the MP3 or AAC format, or any other compressed format. With iTunes, most people prefer Apple Lossless, or WAV or AIFF. This depends on how you plan to use and access the music files.
Hope this helps....let me know if you have other questions....
