yes, the xonar dg does support DD 5.1 (on analog outputs) but no, the xonar dg doesnt have dolby digital live or dts-c for 5.1 over optical however given that all audio is compressed over optical and not via 3.5 and that the dac inside the z906 is of similar quality i'd say it might even work out a bit better in terms of audio quality than going full optical.
that isnt to say that going optical is a bad thing. this is certainly another option. many people somehow think digital optical is superior and it really is not - unless you have an issue with certain devices on your desk introducing a strong EMI signal which affects your audio (which is rare and would give you other issues) in which case optical is less affected or in the case of...