The only way in Windows that I have found for the light to change to the right color is to use WASAPI which bypasses the Windows mixer. That means Windows has nothing to do with it and can't try to up or downsample the data and the Dragonfly can read the correct sample rate. This is due to the setting that the instruction booklet talks about. When you set it you are setting the sample rate Windows will force audio to. That means even if you play a 192 file and have it set to 48, it will play 48 and the Dragonfly will light up blue for all non-WASAPI/ASIO routed content because it's the sample rate its being fed.
So, when one uses the WASAPI/ASIO stuff (i.e. bypassing the Windows mixer) the Dragonfly will detect/read the correct sample rate automatically. - It's good to know it. Thanx.