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if I'm reading this correctly the squeezebox will play 5.1 dts audio

http://www.logitechsqueezebox.com/products/squeezebox-duet.html#tab2 (http://www.logitechsqueezebox.com/products/squeezebox-duet.html#tab2)

Quote
Uncompressed formats (AIFF, WAV, PCM)

    * Supports raw pass-through of uncompressed PCM audio formats
    * Digital passthrough to S/PDIF for DTS

so it sounds like say for a dead show in dts I decode the flacs and the wave files will play over the squeezbox in 5.1 dts.

is there something I'm missing?

Digital passthrough means that the Squeezebox will output the DTS encoded bitstream via it's S/PDIF output.  The squeezebox will not decode the bitstream to analog itself.  You'll then need a DTS decoder downstream from the squeezebox- typically a home theater reciever to decode it to something listenable.  If the analog output is active when playing a DTS stream (not sure if it is or not) the undecoded signal sounds like high level pink noise.