When does someone need a DAC

well... never. But a separate DAC is useful sometimes.

I own several CD machines.. And only my Sony SCD777ES is better using it's own internal DAC for CD than my separate DAC. and using the CD machine as transport only feeding a DAC.

With a higher end CD player.. adding a DAC may, or may not do anything at all for your quality of playback. And the DAc may not even be as good as no separate DAC.

I like to use five disc CD machines all the time. And THEY do benefit from using a standalone DAC.
I currently have FOUR CD changers connected to my DAC.

Yes. A CD player player does have its own internal DAC. It has to, otherwise it wouldn't be able to play the CD. I think a good place to start would be listing what kind of equipment you currently have. If you already have a high end CD player, its very likely you won't need to do anything.

Well, for one thing, you can then use a computer as a "transport" and play digital files.

When it walks like a DAC and quacks like a DAC