Here is a close-up view of the Digital Audio Coaxial and Optical Inputs and Outputs.
These connections are used to access Dolby Digital or DTS surround sound from DVD players, Digital Cable Boxes, Satellite Boxes, or other source component that has either a Digital Optical or Digital Coaxial output connection. Some devices have both options, in which case, you can can choose either.
It is also important to note that some CD-Only players have digital audio outputs as well, however, these are just two channel outputs.
You will also notice that there is one Digital Optical Audio Output. This allows a digital audio connection between the receiver to a CD Recorder or other recording device that has Digital Optical Inputs.