Introduction
These days most home theater receivers come with both Dolby Digital 5.1 and DTS audio capability. In that light, when choosing a new receiver, you should probably select one with both. Some receivers still only have Dolby Digital 5.1, but these are a dying breed. In either case, you may want to know the difference between the two.

Contrary to popular belief, one is not clearly better than the other. Most people believe that since DTS technology came later and was generally found in more expensive receivers that it must be better. DTS does use a higher bit rate for encoding audio signals, but that in itself only gives it the potential to sound better. Both Dolby Digital and DTS are 5.1 formats, which mean they offer 5 discrete audio channels plus one discreet LFE (low-frequency effects) channel, which drives your subwoofer. Both Dolby Laboratories and Digital Theater Systems (the makers of DTS) are working on extended 6 (or more) channel versions.

A little history
Dolby Digital 5.1 was introduced in movie theaters in 1992 with the release of Batman Returns. This audio system is now available in over 9,000 theaters in North America and countless others throughout the world. DTS followed in 1993 and is now available in almost as many theaters.

Dolby Digital (DD, also known as Dolby AC-3) was later chosen as the audio encoding technology for the new Digital TV (DTV) standard. Because of that and DD's lead in the big-screen world, the DVD Working Group (an industry technology group tasked with forming standards for DVD media) chose DD to be one of the two "required" audio programs for the then-new DVD standard, at least for DVDs released in the United States. The other required track is PCM, an older stereo format. DTS was then relagated to become a "secondary" or "optional" audio program along with Sony Dynamic Digital Sound (SDDS), another competitor in this arena.

The Technology
The default bit rate for DD is 384 kbps, while the DTS bit rate is 1400 kbps. On the surface, it seems that the difference should make DTS sound better, but it isn't really that simple. Actually hearing a difference between the two may be a challenge even for an audiophile. The final audio quality you hear on your home theater is highly dependent on the encoding technique and equipment as well as your decoding equipment.

Pros and cons
In general, you should think of these two competitors as just that: competitors in the same game. DTS probably has a slight edge in terms of potential audio quality, but in the end they are both deliver theater-quality 5.1 channel audio to the home user.

    DTS Pros: Higher bit rate can mean better audio quality, DTS is the standard for 5.1 channel audio CDs
    DTS Cons: Limited availability of DTS-encoded DVD movies, DTS DVDs often cost $5-$10 more than their Dolby Digital counterpart, sometimes the added DTS audio size requires the elimination of some DVD extras such as theatrical trailers or "making of" featurettes
    Dolby Digital Pros: DD is the industry standard for DTV and DVD media, nearly all new DVD movies come with a DD soundtrack program
    Dolby Digital Cons: No support for 5.1 channel audio CDs, limited to 448 kbps maximum

The Future
Both Dolby and DTS are working on enhanced versions of their technologies, each adding additional channels to the existing standards. Dolby's version is dubbed Dolby Digital 6.1 EX and the DTS version is DTS 6.1 ES. Again, early reports give DTS 6.1 ES the advantage since it uses 6 "discreet" (separate) channels of data whereas Dolby's 6th channel is a "derived" channel, meaning there are only 5 channels of audio information recorded and the extra channel is created from a mix of the other channels.

Both versions of the enhanced audio require will new hardware to be heard in your home theater system (but who didn't see that coming?) Unfortunately the DTS version, since it records an extra audio track, will be incompatible with existing systems. Since Dolby's version only uses the original 5 channels you will be able to watch Dolby 6.1 EX movies on your old equipment without being able to hear the added benefits.


Bibliography
GDS, "DD vs. DTS: a perspective written by GDS", http://www.audioholics.com/DDvsDTS.htm
Pohlmann, Ken C., "Dolby Digital vs. DTS Which is better?", http://www.soundandvisionmag.com/
http://www.dtsonline.com/
http://www.dolbydigital.com