I purchased an optical cable with two different ends: one is 3.5mm (remember, it has to be optical) and one is normal optical or what's known as TOSlink. Another alternative would be to use a normal TOSlink cable and get an optical 3.5mm adapter in order to fit one end of the cable to the Acer. The audio receiver immediately detected the DD, or DTS, signals.
Your software DVD player has to be set to "use SPDIF" and the Realtek HD Sound Manager has to be set to "Output Digital Source". The Output Sampling Rate I could use are only 44.1 KHz and 48 KHz. I don't know why I can't use 96KHz and 192KHz, but my best guess is I would have to use premium (i.e expensive) optical cable... the finer the fibre, the bigger the throughput.
The SPDIF control on the Sound Manager will remain grayed. It's your audio receiver that has to decode the digital signal and then you have to adjust your volume from there. And NO, you can't actually see the LED blinking in the SPDIF hole.
This has got to be "the most obscure thing(tm)" I have ever encountered. The only clue I could find on the net that the Acer's output is optical is from this article: '...There’s also a full suite of audio ports – headphone, mic and line-in, the latter also doubles as an optical digital output.' link: http://laptop-notebook.blogspot.com/...-8204wlmi.html
which is also not completely accurate!
Moreover the audio world knows the 3.5mm optical output as Mini-TOSlink. It could help your search in audio equipment stores...