The HDAV series can encode a 2 channel pcm to DD or DTS. The AVR will start with direct with 2 ch pcm, when you enable DD/DTS, the AVR will switch and indicate your selection. It can also take input of 2 channel pcm. This is from memory and don't know about last question.
"The purpose of diplomacy is to prolong a crisis." Spock, Mark of Gideon, TOS