No, it doesn't need track-ir. You just need the "face API" from seeingmachines, which is freeware for non-commercial purposes, the program, and the ppjoy software, which is needed to make a virtual joystick. Input is then sent from the tracker software to the fake joystick which is then mapped in DCS.
Additionally, if you use a 32 bit version of dcs, you can skip the ppjoy part and use the track ir fixer, which is a free utility that "unencrypts" the TIR protocol and enables you to use the fake track ir protocol of the tracking program instead of routing everything through a virtual joystick.