Not digital inputs, digital output. And optional, of course.

From the Sherwood P-965 manual, which dedicates the coax digital out to Room 2:

For ROOM 2 playback, the COAXIAL DIGITAL OUT can be connected to the amplifier, etc. installed in another room.(For details, refer to “ROOM 2 connections” on page 11.)

They suggest disabling Room 2 if you need the coax digital output locally.