Ckorody is spot on as far as my understanding goes...
And, to your last point, the bits going over spdif are just bits--the level is going to be determined by your DAC's output, regardless of the input. (Unless, of course, you have something fiddling with gain in the digital domain like kmixer--you don't want that).
And, to your last point, the bits going over spdif are just bits--the level is going to be determined by your DAC's output, regardless of the input. (Unless, of course, you have something fiddling with gain in the digital domain like kmixer--you don't want that).