Simon,

The fundamental key to PWM DAC is low pass filtering. Analyze your circuit using PSPICE and generate a Bode plot. This should tell you if your low pass filter cutoff frequency differs from the PWM frequency by an adequate margin. You should also be able to simulate PWM stimulous and examine linearity. The op-amp may be close in cost considering manufacturing costs associated with so many components and board real estate.

I haven't thouroughly analyzed the circuit, but I have a couple of things you could try. Basically this circuit looks like a level shifter with some wave shaping(filtering) on the base and low pass filtering on the output. It looks like the transistor isn't being driven very hard with 20k ohms to the base at DC. What load is this circuit seeing? It won't be able to supply much current. I would also look at the collector with a 'scope and check to see that it is swinging sufficiently. If not, reduce the collector resistor. These are just general suggestions. PSPICE should provide the most information. Or you could analyze it the old-fashioned way.

Cory Spackman