The RCAs on your XM receiver are ANALOG outputs. You would have to have a DIGITAL output to send to the DAC.
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The manual says "what" is digital? The receiver is because XM is a digital service just like DISH or Direct TV. You need the receiver to use the service, but that doesn't mean the XM unit "outputs" a digital signal.
What's the model number of the XM receiver maybe I can find a manual online to look at for you.
The Lite DAC uses a "coax" digital input, but the connection is still RCA. Don't think of "coax" as in TV coax, (RF connector). Most digital gear uses either a RCA coax input or a BNC coax input and many also use Toslink optical.
I am assumimg you are using the SA10103 Home Kit? It does NOT have a digital output. Unless XM made a different dock kit that included a digital output, you'll have to use the DAC that is built into the unit. Yes, the unit does the digital to analog conversion from within. My Sirius unit is the same way.
Maybe a option,I use a Hughes HD-HTL receiver it has both a coax-rca and a toslink digital out. The Hughes connects to my Monarchy dac that I use for the XM feed provided by direct tv. I purchased the receiver on ebay for 50 bucks,works great and the best part is the receiver has a data window that supplies program info.