As a college student, I am on an insanely low budget, so I can't quite afford too much of that modern gear out there... but I was able to afford a $40 sound card. I know a lot of people spend big money on fancy external DACs, but the M-Audio Audiophile 2496 makes that kind of spending unnecessary. It just requires a desktop computer with a free PCI slot, and it works with just about any version of Windows.
These cards go for about $65 to $80 new, or around $40 used. It has gold-plated analog RCA inputs and outputs. Inputs are excellent for recording a line-level source like the output from a turntable hooked to an external pre-amp. The card is compatible with any popular recording programs like the free Audacity or the expensive Adobe Audition. Combined with a free program to play FLAC files, such as Foobar2000, this card makes for an excellent stereo DAC.
It can even decode 24 bit, 96 kHz audio. Some people may say that internal cards like this produce unwanted noise because of interference picked up within the computer case, but I have never been able to notice any such unwanted noise. It has an extremely clean sound and offers an excellent solution for stereo recording and playback from a computer. It also has a digital input/output over coaxial attachment, but I have never found this useful.
Considering the price, this modern sound card serves as an outstanding DAC and analog-to-digital recorder. I use it for converting vinyl to 24 bit, 96 kHz FLAC files, and I hook the RCA outputs to an amplifier for headphone use.