How does the volume control on DTH box/ Digital set up box work?

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i m using Asianet HD set top box, connected to LG LED with HDMI, From the TV I have used TOSLINK optical cable to my NAD AV Reciever. My understanding was : Video + Audio would go to TV, TV would send the digital audio via TOSLINK to Reciever. (sound bits goes unprocessed here to the reciever, to my knowledge.. ) The NAD decoder would convert these bits and amplify the analogue with its amp to the speakers.

The question I have is : The set top box has a VOLUME control, and this works on the above mentioned connection. If the sound were not supposed to be processed before it reaches the reciever, I was expecting the volume control, to work only with the analog RCA cable. But how does it work over a digital connection now?
 
Yes the volume control works even in digital mode. I have observed this in my d2h and Xtreamer boxes. It does not work in Airtel box though.

I was not expecting volume control in the digital mode!
 
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