Studies of circular DNA confined to nanofluidic channels are relevant both from a fundamental polymer-physics perspective and due to the importance of circular DNA molecules in vivo. We here observe the unfolding of confined DNA from the circular to linear configuration as a light-induced double-strand break occurs, characterize the dynamics, and compare the equilibrium conformational statistics of linear and circular configurations. This is important because it allows us to determine to what extent existing statistical theories describe the extension of confined circular DNA. We find that the ratio of the extensions of confined linear and circular DNA configurations increases as the buffer concentration decreases. The experimental results fall between theoretical predictions for the extended de Gennes regime at weaker confinement and the Odijk regime at stronger confinement. We show that it is possible to directly distinguish between circular and linear DNA molecules by measuring the emission intensity from the DNA. Finally, we determine the rate of unfolding and show that this rate is larger for more confined DNA, possibly reflecting the corresponding larger difference in entropy between the circular and linear configurations.