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To match or improve the theater experience of movie audiences, a digital cinema system must provide high-quality image and sound. Additionally, theater managers require server controls for managing and displaying content in multiple theaters, and studios want their content encrypted with secure delivery, playback, and reporting of play times to the distribution company. Digital cinema refers to the use of digital technology to distribute and project motion pictures. The basic idea is to use bits and bytes (strings of 1s and 0s) to record, transmit and replay images, rather than using chemicals on film, A movie can be distributed via hard drives, optical disks or satellite and projected using a digital projector instead of a conventional film projector. Digital cinema is distinct from high-definition television and in particular, is not dependent on using television or HDTV standards, aspect ratios, or frame rates. Digital projectors capable of 2K resolution began, the pace has accelerated, Digital cinema conforming to the DCI Standard is referred to within the film industry as D-Cinema while all other forms of digital cinema are referred to as E-Cinema

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http://howstuffworksdigital-cinema.htm
http://en.wikipediawiki/Digital_cinema