Yes, alright.
Well the idea is that when you have plugged the device into your media player (your pc in this case) via USB, no other output besides the optical out on the device will produce sound. For instance if you have plugged your speakers into the analog out of the DAC and the DAC itself is linked to your pc via USB, you wont hear anything. So you must use the optical out in order to play music through your speakers.
So somehow, you need to plug your speakers into the optical out of the device. And to be honest, I'm not entirely sure how to do this either... if you can find a cable that has an optical plugin on one side and an RCA (you know, the black and white ones) on the other side, that should work because this way you can can plug the speakers straight into the optical out. But I'm not sure if there even is such a cable... I atleast cant find one.
I'm guessing that the optical out is meant for a seperate amplifier. For instance: you got your pc -> to which you have connected the DAC via USB -> then you got an optical to optical cable (optical plugins on both sides of the cable) into the optical out of the DAC and straight into an optical input of the seperate amplifier -> and then you got your sound system plugged into that amp.
But still, I'm not sure about this. Its just my guess.
So maybe you have to find another way to connect the DAC to your pc? Don't you have a soundcard in your pc that supports S/PDIF output or something? Because thats what I did...
I know that on first sight it looks like the DAC offers alot of different in/output options, and ofcourse it does, but in fact you are still pretty much limited in choices because most of the time there is only one option that works for your current setup.
The DAC has all these different options because it has to be a versatile product, it has to be able to do it's job in various different setups. You just have to pick the right choise for your setup, if you understand what I mean.
I had the same problem, initialy i was planning on connecting the DAC to my soundcard via analog in and my speakers to the DAC via analog out, but then I discovered that the DAC doesnt work via analog in, you do get sound but it wont upsample the audiosignal, which is ofcourse what you buy the DAC for in the first place. So I had to come up with a different solution, luckily I remembered that my soundcard also offeres S/PDIF out so thats what I use now.
I'll see if I can find anything on the web or in the instruction manual about connecting speakers directly to the optical out though, I'll let you know if I've found anything helpfull. Though in the meantime I would suggest you to do some research about other options alright?
Its a very satisfying product once you've finally set it up lol.
Good luck with it. ;-)
PS. About the headphone, fortunately this is a whole lot easier. just connect the DAC to your pc and plug the headphone into the headphone out, set the output switch to headphone and enjoy your music.