"Dolby Stereo" or "Dolby Surround" is a process whereby a movie is mixed to four discrete channels (Left, Center, Right, Surround) which are combined through an audio matrix to a two channel mix that is then recorded to the optical track on the film. This matrixed, two channel printmaster is called a Lt/Rt (Left total, Right total), which is often further encoded with SR Noise Reduction. This terminology tells us it is matrixed information as opposed to simply L/R (Left, Right), or standard stereo.

There are two tracks on a 35mm stereo optical print, referred to as Lt and Rt, which are matrix-encoded to contain four channels of information. Upon exhibition, a theater will do two things to this track. First the theater will decode any noise reduction present (A or SR), and then it will convert the stereo audio back into the original 4-channel Left, Center, Right, and Surround mix.

The 4:2 encoding is done during printmastering, and the 2:4 decoding occurs during playback in the theater. The matrixed 2-track is also designed to be stereo compatible when played as is.

Dolby noise reduction is a process whereby the user runs an audio track through an "encoder" that is designed to counter noise commonly encountered in the audio recording process, i.e.; tape hiss, without adversely affecting the overall frequency response or dynamics. This encoded signal is later played through a "decoder" thereby reducing the "noise" introduced during the generational loss of a transfer.

In their standard form, Dolby Stereo 35mm prints are encoded with A-Type noise reduction. Beginning in 1987, Dolby Laboratories has made their SR (spectral recording) process available on 35mm stereo optical prints, with the advantage of greatly reduced optical noise and increased low- and high-frequency headroom.

All of the stereo optical prints–Dolby Stereo (A-type), Dolby SR, DTS Stereo and Ultra Stereo–occupy the same area as standard mono optical prints and are capable of mono-compatible performance. The exact degree of mono compatibility is mix-dependent.