I have a setup with BeoLab5 speakers, a Beosystem 3 and a DVD 2 as a picture/audio source.

I have a question regarding the cabling between the units. The DVD has both a HDMI and digital audio output. From the user manual for the speakers, it is mentioned that it is generally better to use a digital cable from the audio source to the speakers.

In my setup I have a HDMI cable between the DVD2 and the Beosystem3. In adition a digital cable from the DVD2 to the first BeoLab5, and digital cables between the two BeloLab5 and then finally from the BeoLab5 to the Beosystem 3.

From the Beosystem3  I have powerlink cables to front, center and back speakers.

When playing a DVD, will the Beolab 5 speakers understand that they should use the powerlink signal from the Beosystem 3, and when playing a CD using the digital signal instead? If the Beolab 5 are using the digital signal when playing a movie, it would contain a ordinary stereo signal and not a decoded 5.1 signal from the BeoSystem 3.

What is the correct setup/configuration on the DVD2 or BeoSystem 3 for this?

Thank you in advance for any insight into this.

Yes the BeoLab 5's understand what is going on.  The 'display/data' code sent down the PowerLink cable gives them the source and they switch accordingly.  

I dont think that the BL5 will understand when they shall juse the powerlink ore the digital signal, because they are designet to juse the digital signal when there is one. So the will always take the digital signal also in a dvd`s 5,1 soundtrack.