Encoded Dolby Digital or DTS (from a file, or with some applications from a DVD) can be sent via a computer sound card's SPDIF connection. Most soundcards give you a choice whether the digital output will stream regular PCM or other digital audio.
DVD-A, which is MLP encoded (Meridian Lossless Packing), can't be streamed through SPDIF. A few soundcards play DVD-A directly on a computer's speakers.
Dolby has technology called Dolby Digital Live which will encode and stream audio up to 5.1 in Dolby Digital and stream it through SPDIF, but this is still in its infancy and geared toward gamers.
Good sound cards and good powered speaker systems can sound good, as good or better than many home theater systems, but of course this is subjective.
