The Nuendo Dolby Digital Encoder Software plug-in allows Nuendo Projects to be encoded into Dolby Digital, today's most popular multichannel format found in movie theaters worldwide. Dolby Digital, also known as AC-3, is also the most widely spread audio format for today's DVD-V and therefore the number one choice for delivering surround sound to millions of home theaters all around the globe.

AC-3 is based on an algorithm that takes advantage of auditory masking and both intra- and inter-channel redundancy. This technique guarantees both outstanding audio quality and bandwidth efficiency . Licensed by Dolby Laboratories, the Nuendo Dolby Digital Encoder comprises full functionality of the original Dolby Hardware.