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
I have a NAD processor and display is very good.  Shows incoming signal and it says PCM all the time.  Why doesnt it say dolby digital?  
It does say dolby atmos for hbo max and disney.  Thought hbo max says it will play highest quality audio and video avail for your device (using an apple tv 4k box connected to processor).
Sounds like either a configuration in your audio settings for Netflix on Apple TV or it is a limitation of the app.