As was mentioned, you will need to connect your sound card to your graphics card. More specifically, you will need to connect the SPDIF out (should be a two pin socket) from your sound card to the SPIDIF input on the graphics card. These may just be labeled digital audio. Most will actually say SPDIF on the PCB.
Since this is the SAME digital audio signal carried by the optical (Toslink) or coaxial/RCA (SPDIF) cables you will notice no audio difference between the HDMI connection and the direct digital audio connection. HDMI is designed to carry digtial signals (both video and audio) just fine. HDMI is a very convenient package for transporting audio and video. It is just
one cable after all.
Also, the 3.5mm connector is more often then not an analog signal only. Very few setups use 3.5mm connectors for digital transmission. So, this analog signal will not work for connecting the sound card to the graphics card. The graphics card needs the digital audio signal from your sound card to transmit audio over HDMI.