A multi-bit (M-bit, M>1 ) Sigma-Delta digital-lo-analog converter (DAC) with a variable resolution multi-bit quantizer that has its digital value inputs that are truncated or rounded to a resolution that follows a random or pseudo-random sequence to provide automatic dynamic dithering for removing undesired idle tones in the analog output of the Sigma-Delta DAC. Random numbers N(n) between 1 and M are provided, and M-N(n) least significant bits in each M-bit digital value at the output of the quantizer are forced to zero with a digital trunealor or rounder. The random numbers N(n) may be provided by a random or pseudo-random sequence generator, e.g., Galois linear feedback shift register in combination with digital comparators and an adder.