Digital sigals are data. Otherwise they would not be digital. It is the sound device that makes the sound. So how about HDMI out? they just put the digital signal along with the Video. If you import this into say a HDTV, the HDTV is creating the sound from the digital 5.1 or 7.1 digital stream. This is how I understand it.
My understanding is that dolby digital or SPDIF is Compressed.
This is what Turtle beach said about SPDIF:
USING THE OPTICAL S/PDIF DIGITAL OUT:
All of the AA products come with a built-in Optical S/PDIF Digital Out.
When used with our customized driver software, all of the AA products'
digital outputs can act as a Dolby Digital "Pass-Thru," meaning that you
can use them to pass the Dolby Digital-encoded audio data from the DVD
soundtrack to an external Dolby Digital decoder (usually a Dolby Digital
Receiver). The decoder separates the audio into separate channels, which
are sent to the receiver's amplifiers, and then to the speakers in your
home theater.
The signal is pass through for dolby digital DATA. I think HDMI has the same thing. My research says HDMI version 1.4 has loss less digital audio capabilities.
http://en.wikipedia.org/wiki/HDMI
"Note that it says Dolby Digital is Compressed!"
This is what the Wiki says about HDMI Audio:
For digital audio, if an HDMI device supports audio, it is required to support the baseline format: stereo (uncompressed) PCM. Other formats are optional, with HDMI allowing up to 8 channels of uncompressed audio at sample sizes of 16-bit, 20-bit and 24-bit, with sample rates of 32 kHz, 44.1 kHz, 48 kHz, 88.2 kHz, 96 kHz, 176.4 kHz and 192 kHz.[20][55] HDMI also supports any IEC 61937-compliant compressed audio stream, such as Dolby Digital and DTS, and up to 8 channels of one-bit DSD audio (used on Super Audio CDs) at rates up to four times that of Super Audio CD.[55] With version 1.3, HDMI supports lossless compressed audio streams Dolby TrueHD and DTS-HD Master Audio.[55] As with the YCbCr video, device support for audio is optional. Audio Return Channel (ARC) is a feature introduced in the HDMI 1.4 standard.[56] "Return" refers to the case where the audio comes from the TV and can be sent "upstream" to the AV receiver using the HDMI cable connected to the AV receiver.[56] An example given on the HDMI website is that a TV that directly receives a terrestrial/satellite broadcast, or has a video source built in, sends the audio "upstream" to the AV receiver.[56]
The HDMI standard was not designed to pass closed caption data (for example, subtitles) to the television for decoding.[57] As such, any closed caption stream must be decoded and included as an image in the video stream(s) prior to transmission over an HDMI cable to be viewed on the DTV. This limits the caption style (even for digital captions) to only that decoded at the source prior to HDMI transmission. This also prevents closed captions when transmission over HDMI is required for upconversion. For example, a DVD player that sends an upscaled 720p/1080i format via HDMI to an HDTV has no way to pass Closed Captioning data so that the HDTV can decode it, as there is no line 21 VBI in that format.