What makes a DAC so expensive?

When it comes to the DAC: Is distortion the only word (or the most important...) in transparency AND full realization of the recorded sonic imagery? 

I have been lead to believe that some DACs handle detail and soundstage differently than others and I'm wondering if these features (of subtle detail and soundstage) are fully reflected in distortion figures. 

This is to say, FOR EXAMPLE, what kinds of (general) differences might be reflected in two different DACs, with the following THD+N measurements:

• 0.0003%
  

• 0.003
  

Or what else am I missing, for purposes of discernment, other than the in-my-ear experience of evaluation...

i reach and create a very great S.Q. in the last 2 years: dynamic, clarity all across frequencies,details and more, soundstage in all the room, imaging with depth in near listening and in regular position, 3-d holography, name it...

All that with my controls of the mechanical embeddings, and all this time, i never think one second about my DAC.... It does not exist at all.... And all this time this thing that  never has signal his existence to me, never did’nt hold me back ever, in each and every one step toward better S.Q.....

This is what i call a DAC....i will never look back....

What makes a BMW 230 cost twice as much as a Toyota Corolla?  After all, they are about the same size - the Corolla is probably a little bigger.  What makes Veuve Clicquot champagne cost four times as much as Freixenet?  After all they both come in the same size bottles with very similar corks.  Just in case you think that this is purely snob appeal, I have driven both cars (quite recently) and drunk both champagnes, and I can tell you from personal experience that they do not drive/taste the same at all.  I have a $25 DAC from Ensinin [?] and a $99 DAC from Schiit and even with my hearing loss and untrained ears I can tell you  from personal experience that they do not sound the same.  

Engineering is expensive. Parts are expensive. Manufacturing is expensive. You can go the cheap route or the bespoke route. If you really want to know why good DACs are expensive, read the reviews! 

as to what matters in a dac, let’s make this simple, even though it isn’t...

a) the digital (bitstream) input signal needs to be received and timed correctly for d-to-a conversion, so clock circuit and jitter reduction is key, this is done by electrical isolation, reclocking as needed

b) then the actual d to a conversion / filtering needs to happen with low distortion both in freq response and in timing (phase response) - this is done by the internal dac chip/circuit or discrete ladder network, depending on design

c) then the analog output (post conversion) needs to be prepared for output to the receiving device... this is done by internal amplifiers, or transformers, or some other method... very rarely is the output ported straight out of the dac chip (there can be impedance mismatches with preamps/amps/whatever device is to receive the signal to amplify to drive speakers/headphones you listen to)

d) all the above needs to fed clean and strong power so they do what they do without added noise, so internal power supply design and quality (and power supply isolation of the analog from the digital sections) is key

so when knowledgeable people correctly say, "it isn’t just the dac chip (akm, burrbrown, ess sabre, wolfson...) or the ladder chip (philips tda, etc etc) or fpga (custom circuit) that makes a difference, it is the IMPLEMENTATION of it", that means ALL THE ABOVE designed and working in concert to produce good analog sound, as a holistic system

’what goes into a dac to make it good’ class 101 now in recess

hope this helps