Dolby Digital is the name for audio compression technologies developed by Dolby Laboratories. It was originally named Dolby Stereo Digital until 1994. Except for Dolby TrueHD, the audio compression is lossy. The first use of Dolby Digital was to provide digital sound in cinemas from 35mm film prints. It is now also used for other applications such as HDTV broadcast, DVDs, Blu-ray Discs and game consoles.

Batman Returns was the first film to use Dolby Digital technology when it premiered in theaters in Summer 1992. Dolby Digital cinema soundtracks are optically recorded on a 35 mm release print using sequential data blocks placed between every perforation hole on the sound track side of the film. A constant bit rate of 320kbit/s is used. A charge-coupled device (CCD) scanner in the image projector picks up a scanned video image of this area, and a processor correlates the image area and extracts the digital data as an AC-3 bitstream. This data is finally decoded into a 5.1 channel audio source. All film prints with Dolby Digital data also have Dolby Stereo analogue soundtracks using Dolby SR noise reduction and such prints are known as Dolby SR-D prints. The analogue soundtrack provides a fall-back option in case of damage to the digital data or failure of the digital decoding, it also provides compatibility with projectors not equipped with digital soundheads. Almost all current release cinema prints are of this type and will probably also include SDDS data and a timecode track to synchronize CD-ROMs carrying DTS soundtracks.