Yes you are right that is how it's set up.
The thing is, when I close VLC there is no sound at all.
I'm really sorry about the hassle but this is literally my first time doing all of this, never used 2 pcs and never used rtmp.
Gaming PC - OBS>Custom streaming service>URL = (2nd pc static IPV4 address/Live)>Stream key set to "test"
Streaming PC: Nginx running, OBS linked to twitch stream, VLC media player also running (on VLC I go to Media>Open Network stream> then I have rtmp:// (static IPV4 of streaming PC)/Live/Test - (which is the stream key I used on OBS gaming pc) and it all works.
If I close VLC the video keeps running but sound stops.
So how would I set up the "VLC source"
Do I just add source on streaming PC>VLC Video Source, then what?