Digital signal control

Maybe this is a stupid question / observation…

I have been streaming through a Sonos Connect for several years and recently added a Schiit Modi DAC to my system. Now I am utilizing the S/PDIF digital output from the Connect. I incorrectly assumed that I would lose the ability to control volume via the Sonos app - I looked it up and I was wrong. Next, I was equally surprised to find that I could adjust the treble, bass & balance levels on the Sonos app. How is the digital signal providing more or less bass and treble? How can I ask the 0’s & 1’s to move to the left or right side?