What are the different audio formats used on a DVD?
What about DTS?

DVD can store audio in a range of formats. The most popular is Dolby Digital ( AC-3 ) because it offers good quality, surround-sound and small file sizes so you can comfortably have several audio streams.

Briefly, the most popular audio formats are:

• PCM - Uncompressed stereo audio, 16 or 24-bit. This offers the highest-quality, but
  the large file-size means multiple streams can restrict your options
  
• AC-3 - Aka Dolby Digital. Compressed to enable you to fit more on the disc, a bit like MP3.
  Offers surround-sound with good quality, and the possibility of multiple audio tracks.
  
• DTS - Another compressed audio format. Many people feel that because of it's higher data rate,
  DTS sounds better than AC-3. Not all players support DTS, however.