what happens to PCM when it is processed by DTS or Dolby?

I know PCM is a compressed series of 1s and zeros and is a process for converting analog to digital.  And then it reaches dts or dolby processing.  What happens?  I kinda like dts neural x vs dolby surround which seems inferior.   Using a NAD processor.

seems most stuff coming into a processor is pcm.  
hard to find a good writeup to explain all this