In this paper, an innovative digital demodulation loadpull system setup for power amplifiers and transistors is introduced. It enables the designers to evaluate the system linearity metrics, e.g. error vector magnitude (EVM), of the device-under-test (DUT) performance under different source, load impedances and input power levels. An interesting observation is that the source tuning has more influence on the EVM performance than the load tuning does for the DUT used in this study. Using this new measurement, the designers can have a better understanding of the device performance with respect to system metrics and optimize their designs to them directly, instead of resorting to the traditional analog RF nonlinear metrics only.