HT gets more and more complicated.

Man this sure gets complicated.

I recently upgraded from my old AVR to a new DENON 3803, and man, there are alot of formats out there.

DD 5.1
DD 5.1EX
DTS ES Matrix

for crying out loud. My last Thx cert AVR was nowhere near this complicated.

The worst part, is that the DENON 3803's instruction manual totally sucks.
Here are some questions

1) Which is better? Dolby Digital 5.1? or DTS? Whats the difference?

2) I have a DVD audio player. Right now i have a coax digital interconnect connecting my DVD-A to the Denon, and i have set the DVD player to allow the Denon to do the decoding. Is this wrong? Will the Denon 3803 be able to properly decode the DVD-A discs, or will it decode the info as straight dvd? would it be better to use the 6 channel out from the dvd to the 6 channel input to the denon and let the panasonic DV-A7 DVD-a player do the decoding?

3) PCM is this Pulse Code Modulation?, is it a form of Time divsion multiplexing?

4) Im curious, my DVD manual says that i need to use BITSTREAM to send the data to the DENON. Then it talks about PCM down conversion where it changes the 96/24b signal to 44/18(i think). Is this degrading the sound quality? Does this actually convert it to a lower resolution signal? my DVD manual says i need to set the down conversion to YES.

5) does anyone who owns a DENON know what the AFDM option in the surround setup is? i cannot find anything in the manual about it.
Although I do nearly always prefer the DTS sound track to the DD track, it's typically not available. It may be that there are more DTS available now and increasingly in the future, but I'd say that when I go to the video store, the ratio is probably close to 100:1 in favor of DD. There are vanishingly few of titles available in the newer formats, such as Neo:6, DTS ES, DD EX, etc. It's so few that last fall when I was shopping for upgrades to my pre/pro, I simply crossed those formats off my requirements. I'm sure I'll be upgrading again, and probably more than once, before those formats are numerous enough for me to want to buy equipment to play them.
dts neo:6 isn't a format per se - it's dts's version of prologic 2, or just an algorithm to extract multichannel from 2-channel sources.

as such, nothing will be "recorded" or "released" in neo:6

i use it on occasion, but for the most part prologic 2 does a better job on tv broadcasts and the sort. don't ever use either for music. it's not good.
You are not alone !!
I bought a 2803 (last years version ) and found the manual useless. I called Denon support and the people there very helpful.
AFDM is auto flag detection mode. If set on, and you play a movie that is in DD ex or DTS es, there is an embedded flag in the data. This flag is detected and the surround rear channels are automatically turned on.
And to think I almost considered selling my Rotel to get a more "user friendly" Denon. It took me weeks to figure out how to get the OSD to work since the manual failed to mention you need to be on one of ten different remote settings or it won't work!!
I have been told that DTS is better because it is more subtle, the image is presented in such a fashion that it is harder to place the source or the speaker from where the sound is comming from, it is also said to be more dynamic in general, and it is also said that DTS is going to be the standard format for some around the corner new technology (hidef DVD) dont quote me, just what I have heard.