Modulated current limiting circuit

[saturn1bguy]

Also, what is the function of the shunt regulator?

The app note says: "Thus, the pot's wiper voltage (VIN+) varies with respect to the reference voltage, which in turn remains stable with respect to the supply rail." So:

1) The shunt regulator provides a stable reference voltage for the digital potentiometer,
2) The potentiometer provides the user selectable input voltage to the op-amp, and
3) The op-amp drives the power MOSFET gate which allows more or less current to pass.

Does this still apply if I use a DAC, or does anything else change?

A DAC would replace the shunt regulator and digital pot. But, whichever DAC might be used, it too normally requires a stable reference. Some have such built in, others require it externally.