Information-theoretic limits of a multi-way relay channel with direct links (MWRC-DL), where multiple users exchange their messages through a relay terminal and direct links, are discussed in this paper. Under the assumption that a restricted encoder is employed at each user, an outer bound on the capacity region is derived first. Then, a decode-and-forward (DF) strategy is proposed and the corresponding rate region is characterized. The explicit outer bound and the achievable rate region for the Gaussian MWRC-DL are also derived. Numerical examples are provided to demonstrate the performance of the proposed DF strategy.