Dolby's documentation explicitly states that dialnorm does not in any way alter the dynamic range of the program material. It only reduces the entire volume of the audio by the amount specified. For whatever reason, many ac3 encodes including the GOUT are reduced by 4 db, which seems to be a default setting, without regard to the actual levels of the mix being encoded. This can fool the ear into thinking it has been dynamically compressed when compared to a non-reduced version, such as the laserdisc pcm in this case. This may also be one reason why people think DTS to be superior to Dolby, because they automatically assume the version that is louder by default to be better, when in fact level-matching the two is necessary to make an accurate comparison.

Dynamic range compression profiles can also be part of an ac3 encode, but they rely on accurate dialnorm settings to work properly.