Toslink is a digital interface and is not audio it is pure digital read off the disk converted to "light pipe" and shipped out, thats it, only data ready to be read by a down stream device.
I did not say it was an audio signal, did I? I'm not sure what you're trying to say. The signal has to carry timing and content, and you are converting it from one language to another, and then back to yet another when it reaches the DAC. I don't know that much about this stuff, but my experiences suggest to me that every stage of the road from one point to the next may effect the outcome, and that it's best to do as few conversions as possible. Are you suggesting that because it is not an audio signal that it is not vulnerable to any degradation/errors in transport and conversions?
Marco