Ok thank you, I was getting confused. I know that I used to use Dolby Live! when I had a receiver many years ago before HDMI. It used to have to take the uncompressed audio from a game, convert it to Dolby surround sound, and send it via the optical audio to the receiver. I guess it makes sense that headphones would not require this with CMSS-3D.
So if I go from my internal sound card to a DAC with the optical, what exactly does that do? Just reduces line noise? Wouldn't I only do that if I had problems in the first place? How much of a difference would it make? I tried looking up information on the output of the sound card, not much is mentioned of headphone amplification, so I would assume it would require some sort of external amp to power anything good.
Lets say I am deciding between the X1 or the DT990... so I can PROBABLY keep the current sound card. I would just need an amp and MAYBE a DAC, if you think the difference is that big. Is there that much of a difference between the X1 and DT990 250ohm Pro in reference to amps? The X1 seems better for gaming slightly, but there is approximately a $100 difference in price. I saw the X1 on sale on Amazon in January for $150, too bad I didn't pick that up...
Edit: So apparently my x-fi card does NOT have headphone amplification. Not sure how much the X1 needs, but apparently it does pretty well unamped. I was looking at maybe getting a new sound card with a better built in amp, but apparently Creative moved from cmss-3d to sbx, which people say is inferior to cmss-3d. This makes it even more complicated on what I need to purchase