Your CNC mill/cutter/router follows G-code commands. G-code supports three movements:
1 - Straight lines
2 - Clockwise arcs
3 - Anticlockwise arc
It’s your job to make sure you’re only send supported curves to the water jet.
Lines, arcs and circles in Rhino are good to go.
Twisty Rhino NURBS curves need to be converted to arc chains. If you don’t convert them, they will be approximated by hundreds of short straight lines.
Since you need more efficient Arc objects in your DXF/DWG file, you’ll need to convert your wiggly Rhino curves to arc segments before exporting.
Use the Rhino Convert command.
Use these command option settings:
Tolerance=0.01mm or 0.002"
The tolerance controls how far the arcs will pull away from your NURBS curves. Your machining process and project will determine how much is OK. The distance is in current model units.