Yes, I've come to the sad realization of this fact.

The problem is that my receiver is somewhat on the cheap end. Therefore it has the 5.1 inputs, but not the decoder built in. The DVD player is possibly the cheapest on the market (I got it for free) and it has the digital optical audio output, and no decoder built in.

I can see why they wouldn't have made an external decoder since in most cases it's people buying the less expensive stuff anyway, so the money you save would be spent on an external decoder anyway.

Anyway, the problem I'm running into now is that I want a new DVD player, and really want the new Philips DVDR985 (DVD Recorder). The unit, I was suprised to discover, also does not have a decoder built in.

So I'm thinking I'm going to need to buy a new receiver.