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Anamorphic is a process by which widescreen movies are stored onto DVDs in a way that maximizes the number of pixels used and the quality of the video.

Without an anamorphic transfer, the widescreen picture is stored into the 4:3 (full-frame) format of DVDs by encoding black bars at the top and bottom - the number of lines used by the actual movie image is quite few, as few as 300 lines for movies with 2.35:1 aspect ratio. This is referred to as Letterbox transfer.

With an anamorphic transfer, the widescreen picture is stored as if it is a 4:3 (full-frame) image to use up as many lines as possible for the encoding (minimize the amount of black borders being encoded, 1.85:1 films will have no borders encoded, while 2.35:1 films will have a small border), and so objects appear taller than normal when played back as a 4:3 video. The anamorphic transfer will set a flag to tell the player that the current video is anamorphic, and so either the DVD player or the TV will know this information and then turn the 4:3 image into a 16:9 (widescreen) one, hence restoring the proper height of objects (restoring the correct aspect ratio).