I'm confused Ted. DAC is unrelated to Bluetooth as far as I'm aware. If you're considering a specific product perhaps link to it.

No, 

A DAC converts Digital Audio to Analog and will usually have an analog output connector for headphones etc, ...

Bluetooth is still digital so would gain nothing from it.... 

DACs are usually passthrough output  devices, 

First, if you are aiming for better sound quality, simply do not use Bluetooth.  All the codecs currently used to encode Bluetooth music data compress the data and reduce its quality.  There are some codecs that are much better than others, but none of them are as good as simply transferring the original data directly, which Bluetooth does not do.

Second, a DAC is a Digital to Analogue Converter - it converts digital input data to analog outputs.  Bluetooth is a digital format used as the input to a DAC in Bluetooth speakers and headphones or earbuds.  The Bluetooth audio device has its own internal DAC.  So you can never get the output of a DAC sent over Bluetooth without converting the analogue signal back to a digital format using an ADC = Analogue to Digital Converter.  Which completely defeats the purpose of using an external DAC that is higher quality than the one in your PC or in your Bluetooth speakers or earphones.

If you want to get excellent quality sound, then using an external DAC is a very good way to do it.  You need to feed the analogue output of the DAC to an amplifier and speakers, or to a headphone amplifier and headphones.  You cannot use Bluetooth earbuds or Bluetooth speakers.  Some DACs come with a builtin headphone amplifier, and there are a range of good small DACs now that can be plugged into the USB port of a PC or phone or tablet.  They often also have S/PDIF coaxial cable and/or TOSLINK optical inputs that you can use instead of USB.  Some are very small battery powered units, but they tend to be lower quality devices - but they may be fine for your needs.  I recently invested in a FiiO Q7:

https://www.fiio.com/q7

https://addictedtoaudio.co.nz/products/fiio-q7-portable-dac-headphone-amplifier

This is a battery and mains powered DAC / Headphone Amp with a variety of inputs and outputs, including Bluetooth input (but you never want to use that due to the quality loss).  It is a bit too large and heavy to want to clip it to your belt - you would want to put it in a small backpack.  But it produces very high quality sound when connected to my Sennheiser HD600 headphones.  When plugged in to the USB port of a PC (Windows, Mac or Linux) or the USB port of a phone or tablet, it becomes a the normal default audio output for the device and your usual music software will usually automatically play via it rather than the previous default output.  I am now using it on mains as my DAC for my MythTV multimedia box, and also on battery as a transportable DAC/Amp for my laptop, phone and tablet.

If you invest in a good DAC, then everything after the DAC (preamp, amplifier, speakers, headphones) needs to be as good or better than the DAC.  There is no point in getting a good DAC and feeding its output into crappy headphones.

The missing link is getting the audio signal to my hifi system (Quad preamp and amplier}. That's why I have been using BT to connect my laptop to the Quad setup. The only viable alternative (which would give better sound) is a wired connection crossing half the room.

If I have a separate DAC outputting into my hifi how do I "steer" it to the music I want to stream?

You use a streamer which acts as a target for your streaming service. A Wiim mini is probably the best option if you already have a DAC. The streamer is great, the DAC onboard is ok but benefits from an external DAC.

Bluetooth from Windows is hot garbage. Avoid it if you can.

What service are you streaming from? That has a material difference in what you should use as a streamer.

Moahunter:

 

The missing link is getting the audio signal to my hifi system (Quad preamp and amplier}. That's why I have been using BT to connect my laptop to the Quad setup. The only viable alternative (which would give better sound) is a wired connection crossing half the room.

 

If I have a separate DAC outputting into my hifi how do I "steer" it to the music I want to stream?

 

What model is your Quad preamp?  What inputs does it have?

When using an external DAC with an existing preamp, you usually will just cable from the DAC to the preamp using the RCA line input connections on the preamp.  If both the DAC and preamp have matching balanced connectors, it would be preferable to use them.  Both of those are analogue connections.

There are not many ways of getting a digital connection to the preamp without wires unless it already supports that (some preamps have builtin WiFi and/or Ethernet).  So you need a device that can receive the digital audio or source the digital audio from somewhere and send it to the preamp, placed next to the preamp.  But we really need to know what inputs the preamp has in order to recommend something.  There are a lot of DACs that have the ability to do WiFi or Ethernet now, they just tend to be more expensive.  Or you might want to change to a new preamp that has WiFi and/or Ethernet and a DAC builtin - they usually have an app for your phone or tablet to send the music to them and may have a Windows program also.  Or you could use a cheaper DAC that does USB input paired with a small computer such as a Raspberry Pi that does USB output, and then you control the RPi yourself somehow, maybe using software that has an app for your phone.  The music files can still be on your laptop, as long as it is on your network and exposes the music files to the software in the DAC or RPi.  But you could also store them on the RPi, by adding a hard drive to it or using a really large SD card.