Found this on a QRZ forum and I have tested this and but to bed the rumors you need a sound card for PSK31.

Rule 1) THROW OUT YOUR HESITATION, and most importantly stick that money back in your wallet! you don’t need a cent to try PSK31. Really, it is NOT that difficult(I’m talking to you, Pat ‘MHZ here!! )

You don’t need no high falutin, new fangled fancy pancy interface. Why would you want to spend $100 on one of these ritzy interfaces to TRY OUT PSK31?!?! 

Ok, I’ve just ranted and railed against Rigblaster/Signalink and other dedicated hardware interfaces, what is the secret formula to getting started on PSK31 for free? 

Here are your necessary parts:

1) Radio, preferably with VOX setup. If it doesn’t have VOX, no problem!

2) Hand microphone for radio. Any other kind will also do.

3) Speaker/Microphone on your computer. Either built in or jack will work for both. 

4) Software – If you’re running windows, Digipan is the most popular option. For Linux, MacOS or others (including Windows), FLDigi is an excellent option. Best of all, both are free.

Optional 5) Headphones. Not required, but will make transmitting easier. 

Optional 6) audio patch cable, like the one found here

Steps

1) Find out the central PSK31 Frequency for the band you want to work. Tune your VFO to the listed frequencies, and bump the SSB mode into USB

2) If you have an audio patch cable with the necessary adapters if any for your radio, plug it into the audio out (headphone jack) of your radio into the microphone jack on you computer’s soundcard. If you don’t have a patch cable but rather a built in microphone on your laptop/webcam/etc, move that to as close to the radio’s speaker as possible. 

3)With your radio’s handmic, place it to as close to your computer’s speakers as possible. If you have headphones, plug them into the audio out of your computer’s soundcard and rubber band one side of the headphone to the radio hand mic. 

TIP: If your radio has VOX, turn it on. 

4) Fire up the PSK31 software. If you’re running digipan, you will get something like this: 

Note the blue/yellow area. It should look like the area above, where it is mostly blue/black and some slight yellow. If it looks anything like below, it means you are overdriving the audio. Turn down the radio’s audio until you see what like above. 

5) Adjust the speaker volume on your computer until you are getting at most 30-40 watts output from your radio. Any more and you’re likely overdriving your audio. THIS IS BAD

You don’t want to overdrive your audio with PSK31, especially! This is the same thing as turning the microphone gain all the way up and screaming into the mic. Sure, you’re pegging the watt meter but your signal will be raspy and ####ty. THIS IS BAD

Keep the audio as low as possible, and keep turning it up slowly until you get it just right. 

 There are “macros” in your program that are there to make it easier to get QSOs going. There are ones for “CQ”, for “brag” which tells your partner ham your station. Take the time to fill these in and you’ll save yourself a lot of unnecessary time and typing, especially for calling CQ. Note though, don’t rely on macros as a crutch. Some hams rely on them so much they forget to actually talk! They just hit buttons all day. At least be a person, not a robot and talk with your partner ham!

The lines on your waterfall are signals. Click on them to read what the QSOs are. If you want to call CQ, click someplace in the waterfall which doesn’t have any yellow lines and click the CQ button. 

Transmitting

If you have VOX then your set. All you have to do is hit transmit and the radio will key up automatically. 

If you don’t have VOX, the technique is to type your whole message first before transmitting. Once you’re ready to transmit, then key down the handmicrophone by pressing the PTT button, and then hit transmit in the program. Simply unkey once done. 

There you have it! the Dirt Cheap PSK31 Guide for Dummies