Never mind I think I figured it out with the aid of the archive section. Now to try it out when I get home.
Without the digimod, the instructions make sense:
monitor button on - UA-5 outputs (headphones/line outs) are monitoring the analog input signal (a>d---d>a)
monitor button off - UA-5 outputs (headphones/line outs) are monitoring the USB signal from the pc (which may end up being the UA-5 inputs but could have effects and other signals mixed in)