A K-map can be used for output minimization in digital circuits, but it may not be sufficient for state minimization without first analyzing the state diagram. Drawing the state diagram helps determine if outputs directly correspond to states and if additional logic is necessary. The discussion highlights the importance of accounting for unused states, as they can cause the state machine to stall if not managed properly. It is suggested that unused states should transition back to valid states, ideally the reset state. Overall, a comprehensive approach that includes both state diagrams and K-maps is recommended for effective state minimization.