This device can absolutely handle DTS correctly, it's a recent model (ATMOS/4K/DTS/etc.) and the LX-600u has a Toslink output.

https://usa.yamaha.com/products/audio_visual/av_receivers_amps/tsr-7850/specs.html#product-tabs

I only had one case of a DTS bitstream needed to be forced to DTS decoding 20+ years ago and it was on a DVD that was re-issued with the DTS flag fixed. Never had a DTS LD not recognized by an amp before.

Per the manual, Digital Audio is always the default output when powered on (page 26).

https://manuals.lddb.com/LD_Players/Panasonic/Panasonic%20LX-600_UG-EN_Scan.pdf

(as a trivia, I don't recall a lot of manuals mentioning that "CED and VHD system video discs cannot be played back with this unit"!)

So are we down to a malfunctioning player?

=> Can you play a CD with only Toslink connected to your amp and get music out?

Julien

Julien