Your DVD player is kind enough to have optical and coaxial digital audio outputs (as well as analog). You should pick one - either optical or coax, as they both carry the same audio at the same quality.
On the receiver, you can tell the receiver to choose either digital audio or analog audio or to auto-detect the audio type. It will then use that type of audio. It does not mix audio, but does have the capacity to automatically detect and switch from digital audio to analog audio should the digital signal not be present.
I personally hook up both digital coax & analog audio from my DVD player to my Yamaha receiver. It uses digital audio for all movies, but zone 2 uses analog audio.