If DTS is not showing up as an option then I'm about 95% sure that the 3107 does not support it. The digital coax should have no trouble sending a DTS signal if the player can do it.

I have the Toshiba SD2200 from 2 years ago. It's DTS compatible, so it sends out the undecoded signal where my receiver will decode it.

I had another idea, do you have a five speakers and a sub hooked up? I have a Marantz SR6200 that will not play certain formats (like DTS) if the proper number of speakers are not setup up. I don't have a center channel hooked up to my system right now, so I can not play DTS or Dolby Digital by pushing those buttons. I use Auto a lot, but I'm not sure what signal is being used. I don't know if the 950 has this either.

I hate to deprive you of an upgrade, but it might be time for that anyway.