I have a dx3s that has been upgraded to dsm2, I'm wanting to get a sr3100 and just want to know that these two will work together. If the transmitter is not dsm2 does that mean the receiver will not work? What are the differences from the sr3100 to the sr3500 other then size?

As I understand it the SR3100 will work (with the upgrade or a newish version), but I don't think you can get the fastest 5.5ms frame rate with a DX3S.

The SR3500 is DSM. SR3100 is DSM2, capable of the higher speed, with something like a DX3R.