S/PDIF is the interface, it can be carried via coax (any old RCA cable) or TOSlink (fibre).
The "worst case" with the Xonar is that you'll send an analog signal out from it, into your amplifier. Nothing wrong with that. I can't find anything authoritative that says no Dolby Headphone via S/PDIF; I do know there's a lot of mythology about S/PDIF "bypassing" a soundcard and a bunch of other nonsense though. I'm skeptical, but it could be entirely possible (such a feature would be a driver problem or restriction, not anything to do with hardware, especially not with your downstream devices).
Again, if it doesn't work (in which case, please do report back), you can use the analog output and be just fine.

I see, obob said if it was through S/PDIF it would be good to go, so you are saying it depends on the sound card? In the end if I cannot get a definitive answer I will probably just buy the xonar dg to try it since it is so cheap. i haven't bought the whole setup yet (which will probably be a few weeks esp if I go Shiit and have to wait for backorders) but I will report back hopefully with some results if I do end up doing things that way.
Also when someone says S/PDIF, does that just mean any cable that lists itself S/PDIF?









