Spdif is a digital interface that carries a stereo signal from one spdif to another (for the sake of keeping things simple).
The audio signal is digital and not analogue so you need a spdif cable, not usual rca audio jacks.
Because it is digital the two connected units must be set at the same bit rate ie 44khz. Any variances will result in the audio single sounding slowed down.
One unit is generally set as the master (your soundcard probably) and other as a slave.
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