PC audio cards to Processor


Hello, my question is probably out of the scope of this forum but I will ask any way.
I have decent audio system Mcintosh amps, processor Magico speakers etc.  The system is used for three purposes, home theater movies, stereo music and surround sound PC video games.  I connect the PC audio card to the processor via optical out from the audio card.  In order to get 5.1 surrond I have to set the audio card to 2 channel output even though it is a 5.1/7.1 Dolby DTS card.  If the audio cards software is  set to 5.1 etc. the result is stereo where only two channels received by the processor and converted to stereo on the system.  My question is this, does the processor convert the non Dolby non DTS two channel signal into dolby 5.1 surround.  In other words if I am using a quality PC audio card that is not Dolby and or DTS cabable and is two channel only (made for headphones) does the Dolby DTS enabled processor in this case a Mcintosh convert that two channel signal into the 5.1 surround signal?  

One other question:
Can anyone recommend the best internal PC audio card for 5.1  home theater use?  When PC audio cards are reviewed its almost always for use with headphones and not for componet (processor multiple amps mulitiple subs) driven home theater systems.

Thank you.
Guy
guyt
there are no internal audio cards currently that use hdmi.   Please correct me if I am wrong.  I could possibly go out through GPU Nvidea HDMI however   the onboard, motherboard GPU audio is crap. I thank you for the input however my question is not addressed.  Perhaps I did a lousy job of putting into words.
HDMI provides full 5.1 digital output.

You don't even need a sound card for it. :)

You just have to select HDMI as the default audio. :)
Eric you lost me.  If you are not using an audio card, motherboard onboard sound then what is sending the signal to the processor?  I have a Falcon northwest computer with Nvidia 1080ti in SLI.  Currently The PC sound card, an Asus, is connected to the Mcintosh 122 processor.  If I was to remove the Asus card what HDMI port would I use to connect to the processor?