A Bitstream refers to binary bits of information (1's and 0's) transferred from one device to another.
However, in Home Theater applications, Bitstream refers to a digitally-encoded Dolby Digital or DTS-related compressed audio signal from a source component (such as a DVD, Blu-ray, or HD-DVD player, HD-Cable, or HD-Satellite Box) to a Preamp/Processor (either standalone or built into a Home Theater Receiver) for decoding and distribution to the amplifier stage for final sound reproduction, in analog form, by the loudspeakers. The Bitstream can be sent via Digital Optical, Digital Coaxial, or HDMI interface.
Also Known As: Bit Stream, Digital Bitstream, Audio Bitstream
DVD player "X" contains a Dolby Digital or DTS soundtrack that is Encoded as digital bits on the disc. The DVD player must read this encoding, transfer the encoded signal in Bitstream form via digital optical, digital coaxial, or HDMI connection to Home Theater Receiver "Y" that has a Dolby Digital or DTS Decoder. The Receiver, in turn, converts the digitally encoded Dolby Digital or DTS bitstream into the proper channel assignment in an analog form, then amplified, so that it can be heard by the listener through Loudspeakers.