Problem solved - your TV does have digi-out. Remember to switch to that input when (and only when) you want to watch TV (as opposed to DVD). I wouldn't want you to get a feedback circuit going! Maybe that protection is automatic but I wouldn't count on it.
Looks like your TV digi-out needs to be optical. If you have a TV with coaxial you will need to assign the input to the DH700, which is just a matter of some setting up using the remote.
PQ - Picture Quality, like SQ Sound Quality. Sorry.