My Denon AVR-1705 does not switch to Dolby Digital when set in Auto mode via PCM from a DVD source. It does switch to DTS when audio setup of DVD is set to DTS 5.1. When audio setup of DVD is set to Dolby Digital 5.1 it plays in whatever surround mode was last set in memory. Auto Surround is On. Auto Source is set.
It used to switch to Dolby Digital automatically. It stopped switching after playing DVD Audio in different modes - Ext In, Dolby Digital, Dolby PL II Cinema and Music, and DTS Cinema and Music to check playback differences.