You want bitstream for the DVD player's audio output - PCM will cause it to downmix Dolby Digital 5.1 soundtracks to stereo and will leave DTS totally absent. The PCM signals from CD's would still pass as PCM.

If you like to listen to CD's in stereo mode, I'll recommend a trick that I've been using for years now. Configure the DVD input with the component video input and the optical1 digital input, but then also configure the CD input with the optical1 digital input. This way, you can teach the 990's CD input to always apply stereo to the PCM signals (or upsample, which I recommend) while the DVD input applies surround processing.