[PurpleAngel]

Quote:

Yeah my dad got this like 10 years ago it is really old and I still am rockin' the original 360 so it doesn't have HDMI. But I think you are right on the two channel thing because even when I go to "surround mode" it still only shows it going through two channels the only difference is it sounds really airy if that makes sense.
 
Actually this DAC I got from Gamax has an optical input on the back do you think that can give me 5.1? All it really says on the bottom is CIRRUS LOGIC 24bit 32-192KHz and the voltage. Is it possible I would get better performance out of that as apposed to the stereo receiver?

As a side note, make sure you have the latest firmware for the xBox, sometimes features can be added to later versions of firmware.
 
The gamex DAC can not uncompress a S/PDIF digital audio (6-channel) signal, it would need to have DDL to uncompress.
So you need to have the DDL feature on both ends of the optical cable for it to work.
 
A cheap way that might give you better surround sound is to get a TBS (Turtle beach systems) DSS, they are cheap on eBay
You already have the optical cable, to just need a USB cable to power it, or maybe you will get a used DSS with all the original cables.
The DSS might be able to drive your 80-ohm headphones, if not then get a 3.5mm to RCA cable to run between the DSS headphone jack and the RCA inputs on the back of the receiver.
 
A used Astro mix-amp. would also work.