Cam, was able to check the manual and the previous replies give you the right info. Both the notes on p.9 under connecting to a DD or DTS decoder and the instructions at p.14 indicate that bitstream is the correct setting when connecting to a DD/DTS decoder, which the 3808 has. One additional point is that in addition to the down sampling you should also set the DRC to off. You don't want to level the dynamic range on most occasions and it's a bit curious that the default is "on".

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Enjoy the music, not the equipment.