[bobgpsr]

The older digital audio format carried over coax or optical Toslink is called S/PDIF. Your Denon has that. But S/PDIF is only allowed to carry two channel linear PCM or lossy 5.1 (legacy DD or legacy DTS) as a matter of policy. The HD-A2 will decode, mix with commentary audio, and then re-encode to lossy legacy 1.5 Mbps DTS for output on optical Toslink for any HD DVD it plays. The quality of 1.5 Mbps DTS is very good but not up to the theoretical quality of a true lossless format.

Your Denon ought to be able to take the 5.1 DTS optical input and apply DD PLIIx to it in order to drive the back surrounds for 7.1 sound (this may have to be a manual forcing step -- see your AVR manual).