Audio Sound

Does the optical audio output from a blue-ray player provide surround sound decoding?
My surround sound receiver doesn’t have HDMI input, but it does have optical audio-in and discreet surround sound channel inputs. Can I use this to get true surround sound audio or must I upgrade my receiver to one with HDMI capability?
You will be able to hear Dolby Digital 5.1 and DTS 5.1, which is very good, but those formats are compressed using lossy compression, so the sound quality is reduced in comparison to the master audio produced for the film by the studio.
If you want to hear master quality audio (Dolby TrueHD, DTS-MA, lossless PCM surround), which can also include 7.1 channels of audio, then you would need an HDMI receiver that is also capable of decoding audio from it’s HDMI inputs (some receivers only pass the video from HDMI and ignore the audio, requiring an additional optical connection, so no HD audio with those).
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