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
That is the card that is currently installed, Asus Xoner Essence STXII. The reason I am asking about this stuff because I will have a new gaming machine built, when Nvidia starts using HDMI 2.1.  The PC builder uses Sound Blaster cards, I don't like them.  I have been setting the Asus card to dolby digital live on two channel with the A/V processor set to game dolby etc and it works, all amps subwoofers are needling. I tried what you suggested by going  into the Asus control panel and switched it from Dolby live to PCM and changed from two channel  to six channel and maxed out the sampling rate.  The result was noticeable it really woke up the speakers.  I switched in to 6 channel from two channel thinking that was appropriate because I have two fronts , center, two surround and two subs.   Thanks, your advice  improved the sound.
Great!  However, I would recommend setting your sampling rate to 48khz because SPDIF really cannot transfer 6 PCM channels at 96 or 192 khz.  Also, Dolby Digital / DTS would be a compressed version of 48khz anyways.  This way, you can ensure that you're getting the maximum capable bandwidth of spdif and keep full support of your McIntosh processor.

If, at any time, you want to listen to some 2-channel hi res 24/96 or 24/192 songs, you can always manually go into Asus control panel and switch it back to 2-channel PCM at 192.  But for gaming and movies, 48khz will be excellent anyways.

For the future gaming machine, unless the system or games will generate the hi-res bluray audio formats (DTS-MA and Dolby TrueHD), you are still better off keeping the Asus Xonar for digital COAX s/pdif audio output.  Hmmm, maybe setup two input configurations on your McIntosh.  On input that uses HDMI + digital COAX for audio, and a second input configuration that uses HDMI for both audio/video.
I noticed that the sampling rate received by the Mcintosh is displayed  for a few seconds when the game boots up and audio signal is incoming to the processor.  When I maxed out the sampling rate in the audio card control panel to 192 khz it is displayed by the Mcintosh as the signal being received for processing.  Is this display of sampling rate on the Mcintosh of 192 kHz an exception  to what you said earlier that optical cannot transfer 192 kHz?  Please advise.
Thanks.
Guy
s/pdif can transfer 192 khz, but only for 2 channels.  When you try to push 6 channels, I don't believe it will support it.  If it seems to work with 6 channels at 192khz, then maybe something is different.

Also, you said you have the Xonar Essence STX II.  I don't believe this card has an optical output.  Only a RCA digital coax output.