Dolby Digital audio files used on DVDs. AC3 is a file extension for surround sound audio files used on DVD s format. The AC3 file format was created by Dolby Labs for use in a Dolby Digital audio on DVD, Blu-ray and other digital video formats. AC3 stands for Audio Coding 3.t is more common in computer audio for sound cards to interpret AC3 and put out a PCM stream; however some cards can output a Dolby Digital or DTS stream that may be used on with a home theater amplifier. MIME type: audio/ac3.