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IM not sure if videolan allread supports this but can we get support for digital audio , if it allready supported are there any setting i need to set to to make it use digital

Please, don't make feature requests on daily basis unless you a have good reasons for those requests. SPDIF support has been in VLC for years.

IM not sure if videolan allread supports this but can we get support for digital audio , if it allready supported are there any setting i need to set to to make it use digital

Since 14 september '06 ,member with now 340 post.

And you never saw s/p-dif in VLC audio configuration? OMG.
http://en.wikipedia.org/wiki/Spdif
Ok here we go.
Of course first you need to configure soundcard itselves so that the audio output is going to S/P-dif, and not to analog outputs.
Second, if Amplifier with S/P-dif input has Dolby©®℗ dac's(decoders) onboard , then disable Dolby©®℗ decoding in soundcard settings, and be shure the S/p-dif out is bitstream, and not (l)pcm.
Now in VLC:
Start VLC, then "Tools" -> "Preferences" -> "Audio" -> select "Use S/pdif when available" then click "Save" at the bottom of that screen.
restart VLC and voila, you got digital out sound. (be shurethat the soundcard configuration of S/P-dif out is set to a samplerate that is supported by the receiver of the s/p-dif signal(as high as possible).

Here image example of OS-X VLC, but it'sthe same as Windows/Linux.