Hi Jeff,
first of all, welcome to the forum!
Secondly, I'd suggest you to re-direct this thread to the appropriate place; I mean, RECEIVERS, PROS & AMPS, where you'll get much more feedback.
Well, before you throw your receiver into the wall, I would suggest you to read both manuals (AVR + DVR).
It sounds like an ASSIGNMENT issue. Most probably, your AVR must have a digital assignment that you can play with. In other words, that means you can determine to which component you want to have the digital link on.
It could be CD, DVD, DVD, etc...
Also check the audio/video settings on your DVR, as it could be set to analog rather than digital. Hope this helps.
Keep us posted and good luck!
Cheers / Avliner.