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Re: No, there isn't.

"Which basically states that all the correlated noise from quantization is now buried in the white noise - ie the error signal 'sounds like white noise' because of the dither. This makes total sense from an engineering point of view.

"Now, the question becomes how does the ear/brain deal with it. Maybe someone can answer this question."

It's actually the DAC's digital filter that deals with it... What the dither noise does is enable the signal, otherwise too small to trigger to LSB, to randomly trigger the LSB, where how frequent the LSB is triggered *is* correlated with the low-level signal. These random triggers, when unfiltered, are perceived as noise plus signal. But the interpolation algorithm from the digital filter provides an averaged signal, which is closer to the original signal prior to dithering.

Note that the quantization step size of a filtered signal is a small fraction of that of the raw, unfiltered signal. (20-24 bits versus 16 bits.) So the averaged signal is interpolated between the raw data's quantization steps. Including below the raw data's LSB. This is how adding dither can resolve low-level information below the raw data's LSB. (But as I stated earlier, the playback *must* use digital filtering to reap the benefits of dither.)

The key is when the LSB is triggered by the signal plus dither noise, the averaging by the digital filter's interpolation will make the noise floor seem lower than the actual dither noise added to the signal prior to digitization or truncation.
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