Source direct is also knows are Pure Direct or CD Direct or Bypass or whatever. On an integrated stereo amp it means the tone controls (bass, treble) are bypassed, thus delivering the music as it is on the source - supposingly resulting in a better, cleaner sound.
For AV amps the xxx direct can either mean the signal bypasses all digital processing and is kept completely in the analog domain, however this is nowadays quite unlikely.
On some amps it means the DSP is bypassed only but the signal still undergoes A to D and then D to A conversion while on others it just refers to the tone controls (AD/DA conversion might still apply here, too).