OK, lets see here you are using the L/R outputs on the CDP to L/R input on the RCV, the signal you are sending the denon has already converted. There for you are not using the DAC's in the denon, since it aready is an analog signal. If you what to use the DAC's in the denon hook the Digital out on the CDP (Coax or Toshlink)to digital in put on the denon, like you do for a DVD player. Then the digital signal is pass to the denon's DAc's for processing. Even though you in pure direct the dac's are still in use able/running. Do not forget to switch your setting for the mode (CD) to which digital input it should reconize.
