What is Dolby Digital?

In plain language

Also called AC-3. Up to 5.1 channels, compressed lossily at bitrates around 640 kbps — a fraction of what lossless formats need. It fits down an optical cable, which is why it became universal.

Why it matters in your setup

Because everything supports it, Dolby Digital is the fallback. If your receiver display shows Dolby Digital when you expected TrueHD or Atmos, something upstream decided the better format was not available.

That decision is almost always based on the capability data, not on the hardware. Working out whether the format is genuinely unsupported or merely unadvertised is the difference between buying a new receiver and changing one flag.

What the DR HDMI 8K does with it

DD has its own audio flag on the DR HDMI 8K, separate from DD+ and TrueHD, so you can advertise or remove it independently. The EDID readouts show the Dolby formats supported on both sides of the link, which makes an unexpected fallback easy to trace.