You’re using the ethernet input to the Holo and the i2s to the DSD Mk2. Right? I’m doing the same successfully except that I’m feeding into a Mk1. See my post Holo Red impressions - #235 by shankha
(It doesn’t matter what input you’re using into the Holo.)
The dip switch settings are only for the i2s output because different DAC manufacturers use different pin protocols on the HDMI. For PS Audio it’s as I had said in the post. This was gotten from their manual. The manual says to use ALT1 for PS Audio DACs and see the pic in Holo Red impressions - #165 by 2muchgear for the ALT1 dip settings.