5.1 Sound on Xbox One

Also check the Xbox One settings because there are sound settings in there to make it 5.1 surround sound.

Is there any work in Progress to provide us the 5.1 Sound via optical Output on the xbox one?

as far as i can tell youtube does not support 5.1, at least not through the xb1 app.

I did change to Bistream, then two choices are DTS surround sound and Dolby Digital.

My Xbox 360 and PS4 have sound option which offers Dolby Digital 5.1, whereas XBox One doesn't. Based on that, makes me think it still doesn't process in 5.1 for DD.

No, the Xbox One S does not simulate ATMOS from a 5.1 source.

However, since the Xbox One can run multiple sound applications at any given time (for example you run an Atmos enabled game, while having a music app running in the background), the console will ALWAYS output an ATMOS signal to your receiver, since the
game sound is in spatial surround.

Into that ATMOS spatial surround sound track, the stereo music track will be mixed in. But since the music track does not have surround or height information in it's stereo signal, you won't get the music in ATMOS spatial surround, even if your receiver
shows ATMOS coming in.

If you watch a 5.1 video in VUDU, the Xbox will distribute the 5.1 sound information to the front, center, back surround and subwoofer channels for the ATMOS signal, and your ceiling speakers for example won't get sound.

So even if your receiver shows ATMOS, and you have twenty speakers mounted in your home cinema, only the standard 5.1 speakers will produce sound, if you watch a 5.1 sound source.