Launch the DVD while playing a music file.. If still your mentioned problem persists then the DVD playback program is faulty.. In case then you loose audio on both the music file and the DVD, then check out with your system volume properties.. May be a faulty program is causing it to go as low as 0 when a DVD is being launched..
I ended up uninstalling the DVD in Device Manager, restarted and actually downloaded a different media player other than Windows Media Player. And lo and behold: I now have sound when I play a disc.
Dumb question: if you have a DVD R player, you need to install software to enable it to operate properly, correct? is that what Roxio, Nero, etc all do?