Dolby Pro Logic is a surround sound processing technology developed by Dolby Laboratories, designed to decode soundtracks encoded with Dolby Surround. Dolby Stereo was developed by Dolby in 1976 for analog cinema sound systems. The format was adapted for home use in 1982 as Dolby Surround when HiFi capable consumer VCRs were introduced. It was replaced by the improved Pro-Logic system in 1987.
The term "Dolby Surround" describes the encoding technology or matrix-encoded soundtrack, whereas Pro Logic refers to the decoding technology and processor. The two technologies are mostly identical but a change in marketing was needed so as not to confuse cinema stereo which is at least four channels of audio with home stereo which is only two.
Dolby Surround/Pro Logic is based on matrix technology. When a Dolby Surround soundtrack is created, four channels of sound are matrix-encoded into an ordinary stereo (two channel) sound track. The centre channel is encoded by placing it equally in the left and right channels; the rear channel is encoded using phase shift techniques, typically an out of phase stereo mixdown.
A Pro Logic decoder/processor "unfolds" the sound into the original 4.0 surround—left and right, center, and a single limited frequency-range (7 kHz low-pass filtered) mono rear channel—while systems lacking the decoder play back the audio as standard stereo.
Although Dolby Surround was introduced as an analog format, all Dolby Digital decoders incorporate a digitally implemented Dolby Surround Pro Logic decoder for digital stereo signals that carry matrix-encoded Dolby Surround. One of the first was the MSP400 surround sound receiver and amplifier by RCA for their high-end Dimensia brand. It was released in 1987 for the Digital Command Component System.
Dolby Surround is the earliest consumer version of Dolby's surround sound decoding technology. It was introduced to the public in 1982 during the time home video recording formats (such as Betamax and VHS) were introducing Stereo and HiFi capability. The name Dolby Surround described the consumer passive matrix decoding technology; the professional, active matrix cinema technology bore the name Dolby Stereo. It was capable of decoding Dolby Stereo 4-channel soundtracks to 3 output channels (Left, Right, Surround). The Center channel was fed equally to the Left and Right speakers. The Surround channel was limited to a 100 Hz to 7 kHz frequency bandwidth, as dialog from the center channel could leak into the surround channel - there was as little as 3 dB of separation between LCR and Surround channels.
In 1987 the decoding technology was updated and renamed Dolby Pro Logic.
A Pro-Logic decoder also uses 'Steering Logic', which drives amplifiers, to raise or lower the output volume of each channel based on the current dominant sound direction. For example, while a mono signal is played, the strong correlation to the center channel triggers the output volume of the left, right and surround channels to be lowered. This increases the channel separation achievable, to around 30 decibels between channels. By careful tuning of the response of the amplifiers, the total amount of signal energy remains constant and is unaffected by the operation of the channel steering. Additionally the response time of the system to changes in sound direction is important as too fast a response results in a twitchy feel, while too slow a response leaves sounds coming from an inappropriate direction.
In addition to 5db of noise processing, the surround channel is slightly delayed, so that any front channel sounds that leak into the surround channel arrive at the listener after the front channels. This takes advantage of the Haas effect - audio that is present in the front speakers but delayed in the surround speakers will have the psychoacoustic effect of emanating from the front of the sound stage.
Dolby Surround and Dolby Pro Logic decoders are similar in principle, as both use matrix technology to extract extra channels from Dolby Stereo stereo-encoded audio. The terms Dolby Stereo, Dolby Surround and Lt/Rt are all used to describe soundtracks that are matrix-encoded using this technique. 
In 2000, Dolby introduced Dolby Pro Logic II (DPL II), an improved implementation of Dolby Pro Logic created by Jim Fosgate. DPL II processes any high quality stereo signal source into five separate full frequency channels (right front, center, left front, right rear and left rear). Dolby Pro Logic II also decodes 5 channels from stereo signals encoded in traditional four-channel Dolby Surround. DPL II implements greatly enhanced steering compared to DPL, and as a result, offers an exceptionally stable sound field that simulates 5 channel surround sound.
Because of the limited nature of the original DPL, many consumer electronics manufacturers introduced their own processing circuitry, such as the "Jazz", "Hall", and "Stadium" modes found on most common home audio receivers. DPL II forgoes this type of processing and replaces it with simple servo (negative feedback) circuits used to derive five channels. The extra channel content is extracted using the difference between the spatial audio content between two individual channels of stereo tracks or Dolby Digital encoded 5.1 channel tracks and outputs it appropriately. In addition to five full range playback channels, Pro Logic II introduced a Music mode which includes optimized channel delays, and adds user controls to--for example--adjust apparent front sound stage width.
Pro Logic II system also features a mode designed specifically for video gaming, and was frequently used in game titles for Sony's PlayStation 2, Nintendo's GameCube and Wii as an alternative to digital surround formats such as Dolby Digital, or DTS.
A newer Dolby Pro Logic IIx system is also now available, which can take two-channel stereo, Dolby Surround (sometimes called Dolby Stereo Surround) and Dolby Digital 5.1 source material and up-convert it to 6.1 or 7.1 channel surround sound.
Dolby Pro Logic IIz expands on Pro Logic IIx with the addition of a height component, creating front height channels above the front left and right speakers, expanding a 5.1 or 7.1 system to 7.1 Height or 9.1. It identifies spatial cues in low-level, uncorrelated information, such as ambience and effects like rain or wind in the side and rear surround channels, and directs it to the front height speakers. The channels it adds are matrixed, not discrete.
Dolby reintroduced the Dolby Surround terminology in 2014 to refer to something entirely new. The term now refers to a new upmixer whose "... purpose is to enable Atmos receivers and speaker configurations to serve non-Atmos signals." Dolby Surround is a complete replacement for Pro Logic that upmixes stereo and multi-channel inputs to play over Atmos configurations. It is:
"...part of the Dolby Atmos bundle of technologies. It is an upmixer designed to function with traditional channel-based layouts, as well as Atmos enabled layouts that include overhead or Atmos-enabled speakers. It processes native stereo, 5.1, and 7.1 content.
How does it work?
The Dolby Surround upmixer is based on phase and gain relationships of elements in the signal, but importantly employs wideband functionality that analyzes and processes multiple perceptually spaced frequency bands in the signal. The benefit is a finer-grained analysis of the source content prior to steering. The result, we believe, is a more accurate soundstage. When employed with overhead or Dolby-enabled speakers there is sense of additional spaciousness or what I call "air."
What's the best speaker configuration for Dolby Surround?
It is not limited to a specific speaker count. It can be employed in a 5.1.2 Dolby Atmos system, a 24.1.10 Dolby Atmos system, or any speaker configuration in between."