SPDIF is digital. For some reason, the manufacturer decided to put a dual mode jack in there, one that has digital and analog. Possibly the reason is this: you hook your speakers up to your audio output (probably a more precise designation for this jack than SPDIF). If you want to hook up headphones, you plug those into the headphone jack, deactivating the audio out jack. This way, you don't have to swap cables. It's pretty common, actually.
I am the Doctor, and THIS... is my SPOON!