DL3 is a method by which multi-channel digital DSD & DVD-A bitstreams and LPCM are transmitted from the 3910 to a compatible receiver using the Denon Link cable. This is a high-bandwidth low-jitter connection which will yield the ultimate audio quality.
SOURCE DIRECT is a 3910 setting which permits it to output the audio without adding speaker settings or channel level processing to the audio signals of DVD-Audio or SACD. Using Denon Link disables SOURCE DIRECT. This is because when you use Denon Link, your receiver manages all of your speaker settings (i.e., delays, levels, bass management). That's the nice thing about Denon Link, you don't have to redundantly make your speaker settings in both your receiver and your DVD player. See the manual for further detail.