If you have Output Encoding set in DSP Studio Output Formatting, then everything is output as DSD. That means flac is being converted to DSD. That setting is meant for someone who wants everything to be sent as DSD, which is not what you want. So, set that to None. The skipping is happening because your PC is not fast enough to convert flac to DSD on the fly.
To send DSD, you need to have Bitstreaming set to On for DSD.
You can use either the Chord ASIO driver or the MC Wasapi driver. In the case of ASIO, you want to check the DoP box. In the case of Wasapi, then it will automatically uses DoP. Wasapi cannot send native sample rate DSD. I have found with my Hugo that on Windows 10 using Wasapi is the best choice. The ASIO driver does not always work with DSD on Windows 10.
If you look at Audio Path (gear at top right) it will tell you what is is playing, either no change for flac or DoP for DSD.
Also, be sure you have volume set to 100% when playing DSD.