My AVR has only one HDMI out which just sends the video signal (from the BD player or the AppleTV2). The optical out is for broadcast tv only. TV for us is OTA only so I use the optical out from the tv to send the DD 5.1 audio from the ATSC tuner to the HTS. You have to be able to pick the input you want to watch on your AVR. For example, my AVR has 4 High Speed HDMI inputs and one HIgh Speed HDMI output. The optical input on the AVR is for the tv only if I am pushing audio out from the ATSC tuner (which I am). The tv audio is always turned off on the tv. If I want to watch a DVD, I select Input 1 on the AVR and the audio/video signal is sent from the BD player to the AVR via HDMI, with the video signal going to the tv via the HDMI out. If I want to use the AppleTV2, I select input 2 on the AVR and the sequence is the same. Watching tv, the audio source is the tv and in that case, the audio goes to the AVR via the optical cable. In your case, the built-in DVD player should send the audio to the AVR and video to the tv. If you use your tv's ATSC tuner for tv, then the audio for tv will go to the AVR via the optical. It's basically the same thing. If you want to connect another DVD player to your HTiB, just use another open HDMI input on your AVR and select the input source. You can send the audio signal via HDMI thru the tv and out the optical but the best you will probably get is multi-channel stereo depending on what your tv can do. You can not send dts-MA or DolbyTrueHD audio thru the optical cable.