I have a Denon AVR-2803 receiver and am experiencing the following problem using various DVD players connected either by optical or coaxial cable. When I play a movie with a Dolby 5.1 or DTS soundtrack, with the receiver set to "5 CH STEREO," the appropriate indicator light on the front of the receiver turns on to indicate that the surround track is detected. The problem is that I do not have proper separation between channels. The rear channel material is also being heard through the front channels, and I hear center channel material through all speakers. The volume is fine, and I clearly notice the difference between 5.1, 2-channel stereo and DTS tracks, but the surround placement is incorrect. I confirmed my suspicions about improper sound placement when I rented two DVDs with a THX Optimizer feature. Using the audio test of this feature, I am supposed to hear a test tone travel around the room to one speaker at a time. Instead, when I am supposed to hear the center's sound, I hear that sound through all 5 speakers (except subwoofer), and when I am supposed to hear just the tone in the left front speaker, I hear that tone in the center, left front and left rear. The same goes for the right side. When I am supposed to hear the left rear speaker alone, I hear that tone in the left rear and left front. The same goes for the right. When I check the 2803 setup menu, I see that the Digital In Assignment is correct, and when I use the receiver's test tone for Channel Level, I do hear that tone go around the room in each speaker individually. In the setup menu, the Auto Surround Mode is on. When I use the 6 analog audio connections ("Ext. In.") from my DVD-2200 player, and play a movie with a 5.1 or DTS track, I finally *do* hear the correct sound placement, for example with the dialogue track solely in the center speaker. This is how I concluded that something is definitely wrong with the digital audio. I'd appreciate it if someone could help me understand the problem, thank you.