The IV is the variable which the experimenter manipulates, in this case whether the information is presented via 'chunking' i.e. AIDS DSA or 'non chunking' i.e. A I D S D S A.
The DV is the variable which is measured, so in the case of your experiment, the participants score, for example, how many 'letters' they recall correctly.
Your hypothesis would (most likely!) be 'participants in the 'chunking' group will remember significantly more letters than participants in the 'non chunking' group'
Also, it's probably best to call the 'non chunking' group the 'control' group, as you're basically looking to see whether there is a positive effect in terms of memory, if information is chunked, it's just I called it 'non chunking' to begin with to clarify the different groups.
In addition, if this is for A Level/Uni psychology, and you're required to suggest further studies, you can also advise using numbers of important dates instead of letters, such as:
Chunking Group: 1 0 6 6 1 9 4 5 1 9 6 6
(Battle of Hastings, End of 2nd World War, England Winning World Cup)
Control Group: 1 5 4 8 9 5 6 2 1 5 8 9
(Random meaningless numbers)
Hope that helps :o)