DVD Players

• A digital optical cable can be used to transfer an audio signal from one component, like a DVD player, to another component, such as a receiver. Or, in some cases, an optical cable might be able to directly connect to a TV, assuming the TV had an optical port.
  
  

CD Players

• People who want high-quality sound from a CD player might attach it to a receiver with a digital optical cable. Because digital optical cables are ideal at replicating a signal, and hardly any data is lost in the transfer, they make great solutions for generating high-quality sound.
  
  

Portable Devices

• Some portable devices, like a Sony MiniDisc player, are capable of transferring data to another component through a digital optical cable. So if you wanted to play music on a MiniDisc player through a digital receiver, you could connect the two components with a digital audio cable.
  
  

Surround Sound/Home Theater

• Many high-quality surround sound/home theater systems use digital optical cables to connect a subwoofer to a receiver. This makes the sound quality coming through the subwoofer much higher than it would be if it was simply connected with speaker wire.
  
  

Game Consoles

• Some of the more recently developed game consoles, like the Playstation 3, connect to a television with a digital optical cable. This transfers the video and audio signal from the console to the television.