Dirac video encoding has been fixed in 0.6.1.4140. In the past, Dirac encoding was done by calling Dirac encoder DLL. Now it is done by FFmpeg, which allows the encoded bitstream to be muxed into a container format together with audio stream. Dirac decoding and playback is also supported by building Schrodinger into MPlayer and MEncoder.

Dirac is a prototype algorithm for the encoding and decoding of raw video. It was presented by the BBC in January 2004 as the basis of a new codec for the transmission of video over the Internet. The codec was finalised on January 21, 2008, and further developments will only be bug fixes and constraints. The immediate aim is to be able to decode standard digital PAL TV definition (720 x 576i pixels per frame at 25 frames per second) in real time; the reference implementation can decode around 17 frames per second on a 3 GHz PC but extensive optimisation is planned. This implementation is written in C++ and was released at SourceForge on 11 March 2004. The codec is named in honour of the British scientist Paul Dirac.

A second implementation of the dirac codec called “Schrödinger” aims to provide portable libraries as well as accompanying GStreamer plugins. The project is written in C. It also hopes to allow embedding Dirac inside the Ogg container format. The project is named after Erwin Schrödinger.