When would you use a DAC, and how does it differ from PWM?

A DAC directly produces a true analog voltage from a digital value, useful for generating smooth, fast-changing analog signals: audio output, arbitrary waveform generation, precise analog control voltages (e.g., a setpoint to an external analog circuit), or sensor excitation. PWM plus an RC low-pass filter is the poor-man's DAC: it averages a duty-cycle-modulated square wave into an analog level, which is cheap and uses a timer you already have, but it has tradeoffs, there's residual ripple at the PWM frequency, the RC filter limits how fast the output can change (bandwidth vs ripple tradeoff), and resolution trades against frequency. A real DAC gives a clean output that can change every sample with no filter-settling delay and no ripple, at the cost of needing the dedicated peripheral and usually an output buffer (op-amp) because the DAC pin can drive only a tiny current. So: use a true DAC when you need fast, clean analog (audio, waveforms); use PWM+RC when the signal is slow, you can tolerate ripple, and you want to save the DAC peripheral or the MCU lacks one. Both ultimately need attention to output drive strength for real loads.