Will a power supply improve SQ when using the ND5XS digital output?

I do not know how,but when I added my XPSDR to my 272,it improved the sound coming from the digital out on the 272.Sometimes I use it this way when feeding my Dynaudio XD 600s(active).One thing I can add...when I tried an XP5XS on my 272,I barely heard any kind of improvement,I would avoid that power supply if I were you.I assume that is what you meant in your quote,not ND5XS.

No Quarter given, none taken. You are correct. The Naim model numbers got me again. I am indeed wondering about the XP5XS specifically and you addressed that. Curious though how the XPSDR improved digital on your 272. Perhaps the mere fact of disabling the analogue circuits quiets things down for the digital performance.  Not sure at all but in my head, the perfomance issues are more important than the "why".

I would guess it has to do with the power supply no longer being in the same box,but it does upgrade analog and digital to my ears.I also noticed an improvement when I compared the digital out of my old Unitiqute 2,to the bare 272,again,while feeding my XDs directly.in that case,it went from really good hifi to the musician is in the room with me.I mainly use the XDs for home theatre now,but from time to time,I still run them in 2 channel.They also work really well directly off my Core,which may end up as all I need,as I get older,if only the Core had internet radio.My conlusion with digital is that better digital sources do affect the end result you hear...same as analog.

Generally speaking the external power supplies in ND5XS and NDX upgrade only the analogue output stages.

There might be some improvement to the digital section, but I have not heard one.