<PAGE>

                                                                   EXHIBIT 10.24

                                    WARRANT

THE SECURITIES REPRESENTED BY THIS CERTIFICATE AND THE SECURITIES WHICH MAY BE
ACQUIRED ON THE EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS, AND, ACCORDINGLY,
SUCH SECURITIES MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT IN
COMPLIANCE WITH THE REGISTRATION OR QUALIFICATION PROVISIONS OF APPLICABLE
FEDERAL AND STATE SECURITIES LAWS OR APPLICABLE EXEMPTIONS THEREFROM.

No. of Shares                                                    Warrant No. H-1
of Preferred Stock: 59,435
                                     WARRANT

               to Purchase Series A Convertible Preferred Stock of

                          DIGITAL THEATER SYSTEMS, INC.

         THIS IS TO CERTIFY THAT Hambrecht & Quist, LLC ("Hambrecht"), in its
capacity as placement agent, or its registered assigns, is entitled to purchase
in whole or in part from time to time from Digital Theater Systems, Inc., a
Delaware corporation (the "Issuer"), at any time on and after the Effective
Date, but not later than 5:00 p.m., California time, on December 31, 2007 (the
"Expiration Date"), 59,435 shares of Preferred Stock ("Preferred Stock") at a
purchase price of $2.019 per share (the "Exercise Price"), subject to the terms
and conditions provided herein. The number of shares of Preferred Stock for
which this Warrant shall be exercisable and the Exercise Price are subject to
adjustment from time to time as provided herein.

         SECTION 1. Certain Definitions.

         As used herein, the following terms shall have the following meanings
(all terms defined in this Section 1 or in other provisions of this Warrant in
the singular to have the same meanings when used in the plural and vice versa):

         "Affiliate" means, with respect to any specified Person, any other
Person that, directly or indirectly, controls, is under common control with, or
is owned or controlled by, such specified Person. For purposes of this
definition, (i) "control" means, with respect to any specified Person, the power
to direct the management or policies of the specified Person through the
ownership of voting securities, by contract, voting agreement or otherwise, and
(ii) the terms "controlling", "control with" and "controlled by", etc. shall
have meanings correlative to the foregoing.

         "Board" shall mean the Board of Directors of the Issuer.

         "Business Day" shall mean any weekday that is not a nationally-observed
holiday.

         "Certificate of Incorporation" shall mean the Certificate of
Incorporation of the Issuer as in effect at the time in question.

                                       1

<PAGE>

         "Change of Control" shall mean (i) any consolidation or merger of the
Issuer, other than any merger or consolidation resulting in the holders of the
capital stock of the Issuer entitled to vote for the election of directors
holding a majority of the capital stock of the surviving or resulting entity
entitled to vote for the election of directors, (ii) any person or entity that
is not a stockholder on the date hereof becoming the holder of a majority of the
capital stock of the Issuer entitled to vote for the election of directors, or
(iii) any sale or other disposition by the Issuer of all or substantially all of
its assets to a third party.

         "Common Stock" shall mean the Issuer's Common Stock, par value $.0001
per share.

         "Current Market Price" shall mean, as to any security, the average of
the closing prices of such security's sales on all domestic securities exchanges
on which such security may at the time be listed, or, if there have been no
sales on any such exchange on any day, the average of the highest bid and lowest
asked prices on all such exchanges at the end of such day, or, if on any day
such security is not so listed, the average of the representative bid and asked
prices quoted in the NASDAQ System as of 4:00 P.M., New York City time, on such
day, or, if on any day such security is not quoted in the NASDAQ System, the
average of the highest bid and lowest asked prices on such day in the domestic
over-the-counter market as reported by the National Quotation Bureau,
Incorporated, or any similar or successor organization (and in each such case
(i) averaged over a period of 21 days consisting of the day immediately
preceding the day as of which "Current Market Price" is being determined and the
20 consecutive Business Days prior to such immediately preceding day and (ii)
excluding any trades that are not bona fide, arm's length transactions). If at
any time such security is not listed on any domestic securities exchange or
quoted in the NASDAQ System or the domestic over-the-counter market, the
"Current Market Price" of such security shall be the fair market value thereof
as determined by the Board in its sole discretion.

         "Effective Date" shall mean October 24, 1997.

         "Exercise Condition" shall have the meaning assigned to it in Section 2
hereof.

         "Exercise Notice" shall have the meaning assigned to such term in
Section 2 hereof.

         "Exercise Price" shall have the meaning assigned to such term in the
first paragraph of this Warrant.

         "Expiration Date" shall have the meaning assigned to such term in the
first paragraph of this Warrant.

         "Hambrecht" shall have the meaning assigned to such term in the first
paragraph of this Warrant.

         "Holder" shall mean Hambrecht and its permitted transferees.

         "include" and "including" shall be construed as if followed by the
phrase, "without being limited to".

                                       2

<PAGE>

         "Issuer" shall have the meaning assigned to such term in the first
paragraph of this Warrant.

         "NASDAQ System" shall mean the National Association of Securities
Dealers Automated Quotation System.

         "Person" shall be construed in its broadest possible sense and shall
include any individual, corporation, general or limited partnership, joint
venture, association, limited liability company, joint stock company, trust,
business trust, bank, trust company, estate (including any beneficiaries
thereof), unincorporated organization, cooperative, association or governmental
branch, authority, agency or political subdivision thereof.

         "Preferred Stock" shall have the meaning assigned to such term in the
first paragraph of this Warrant.

         "Securities Act" shall mean the Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder.

         "Warrant" shall mean this Warrant and all warrants issued upon
transfer, division, or combination of, or in substitution for, this Warrant.

         "Warrant Stock" shall mean (a) all shares of Preferred Stock issued or
issuable from time to time upon exercise of this Warrant, (b) all other
securities or other property issued or issuable upon any such exercise and (c)
any securities distributed with respect to the securities referred to in the
preceding clauses (a) and (b); provided, however, that the term "Warrant Stock"
shall not include shares of Preferred Stock or other securities following the
time such shares or other securities have been sold in a public offering
registered under the Securities Act or sold under Rule 144 promulgated
thereunder. As used in this Warrant, the phrase "Warrant Stock then held" shall
mean Warrant Stock held at the time of determination by the Holder, and shall
include Warrant Stock issuable upon exercise of any Warrants held at the time of
determination by such Holder.

         SECTION 2. Exercise of Warrant.

         (a)      On and after the Effective Date and until 5:00 p.m.,
California time, on the Expiration Date, the Holder may exercise this Warrant,
on one or more occasions, on any Business Day, in whole or in part, by
delivering to the Issuer, at its office maintained for such purpose pursuant to
Section 5 hereof, (i) a written notice of the Holder's election to exercise this
Warrant, which notice shall be substantially in the form of Annex A attached
hereto and shall be properly completed (the "Exercise Notice"), (ii) payment of
the Exercise Price (payable as set forth in Section 2(b) below) for the Warrant
Stock as to which this Warrant is being exercised, and (iii) this Warrant.
Except to the extent necessary to cause the number of shares of Preferred Stock
deliverable as provided in Section 2(b) to be a whole number of shares, this
Warrant shall be exercisable in part only for a whole number of shares.

         (b)      At the option of the Holder, the Exercise Price shall be
payable (i) in cash or by certified or official bank check payable to the order
of the Issuer or (ii) by exchange of this Warrant in accordance with the further
provisions of this Section 2(b). In exchange for the

                                       3

<PAGE>

portion of this Warrant that is being exercised at such time, the Holder shall
receive the number of shares of Preferred Stock determined by multiplying (A)
the number of shares of Preferred Stock for which this Warrant is being
exercised at such time by (B) a fraction, (1) the numerator of which shall be
the difference between (x) Current Market Price per share of Preferred Stock at
such time and (y) the Exercise Price per share of Preferred Stock, and (2) the
denominator of which shall be the Current Market Price per share of Preferred
Stock at such time. The Issuer shall issue a new Warrant for the portion, if
any, of this Warrant not being exercised as provided in Section 2(f).

         (c)      Subject to the provisions of Section 2(d), upon receipt of an
Exercise Notice, the aggregate Exercise Price payable and this Warrant, the
Issuer shall, as promptly as practicable and in any event within five (5)
Business Days thereafter, issue to the Holder one or more stock certificates
representing the aggregate number of shares of Preferred Stock to which the
Holder is entitled and transfer to the Holder of this Warrant appropriate
evidence of ownership of other securities or property (including any cash) to
which the Holder is entitled, in such denominations, and registered or otherwise
placed in, or payable to the order of, such name or names, as may be directed in
writing by the Holder (subject to restrictions on transfer contained herein),
and shall deliver such stock certificates, evidence of ownership and any other
securities or property (including any cash) to the Person or Persons entitled to
receive the same, together with an amount in cash in lieu of any fraction of a
share (or fractional interest in any other security), as hereinafter provided.
The Issuer shall pay all expenses in connection with, and any and all
documentary, stamp or similar issue or transfer taxes of the United States or
any state thereof payable in respect of, the issue or delivery of the Warrant
Stock upon exercise of this Warrant. However, the Issuer shall not be required
to pay any tax or other charge imposed in connection with any assignment or
transfer involved in the issue of any certificate or other evidence of ownership
of Warrant Stock.

         (d)      The Holder's election to exercise this Warrant may, in the
sole discretion of the Holder, be conditioned upon, and in such event, the
exercise shall be subject in all respects to a Change of Control, the
consummation of a sale of the Issuer, any public offering of the Issuer's
Preferred Stock registered under the Securities Act or other similar transaction
involving the Issuer (collectively referred to herein as the "Exercise
Conditions"), as specified in the Exercise Notice, and the Issuer shall provide
the Holder with written notice no less than 20 Business Days prior to the
occurrence of an Exercise Condition (or such shorter period of time as is
practicable under the circumstances). If any exercise of this Warrant is so
conditioned, then, subject to delivery of the items required by Section 2(b),
the Issuer shall deliver the certificates and other evidence of ownership of
other securities or other property in such manner as the Holder shall direct as
required in connection with the consummation of the transaction upon which the
exercise is conditioned. At any time that the Issuer shall give notice to the
Holder that such transaction has been abandoned or the Issuer has withdrawn from
participation in such transaction, the Issuer shall return the items delivered
pursuant to Section 2(c) and the Holder's election to exercise this Warrant
shall be deemed rescinded.

         (e)      The stock certificate or certificates or other evidence of
ownership of Warrant Stock to be delivered pursuant to Section 2(c) hereof shall
be deemed to have been issued, and the Holder or any other Person so designated
to be named therein shall, to the extent permitted by law, be deemed to have
become a holder of record of the Warrant Stock represented thereby,

                                       4

<PAGE>

including having the right to vote any voting securities included therein or to
consent or to receive notice as a shareholder, as of the date on which the last
of the Exercise Notice, payment of the Exercise Price and this Warrant is
received by the Issuer as aforesaid (subject, in the case of an exercise to
which Section 2(d) applies, to the transaction upon which such exercise is
conditioned), notwithstanding that the transfer books of the Issuer shall then
be closed or that such certificates or other evidence of ownership shall not
then actually have been delivered to the Holder.

         (f)      If this Warrant shall have been exercised only in part, the
Issuer shall, at the time of delivery of the certificate or certificates or
other evidence of ownership of Warrant Stock, execute and deliver to the Holder,
without charge, a new Warrant evidencing the rights of the Holder to purchase
the unpurchased Warrant Stock called for by this Warrant, which new Warrant
shall in all other respects be identical to this Warrant, or, at the request of
the Holder, appropriate notation may be made on this Warrant and the same
returned to the Holder.

         (g)      The Issuer shall not be required to issue any fractional share
of Preferred Stock (or fractional interest in any other security) upon exercise
of this Warrant. As to any fraction of a share (or fractional interest in any
other security) that the Holder would otherwise be entitled to receive upon such
exercise, the Issuer shall pay a cash adjustment in respect of such fraction in
an amount equal to the same fraction of the Current Market Price per share of
Preferred Stock (and/or other security) on the date of exercise; provided,
however, that in the event that the Issuer undertakes a reduction in the number
of shares of Preferred Stock or other securities outstanding, it shall be
required to issue fractional shares or fractional interests in such other
securities to the Holder if the Holder exercises all or any part of this
Warrant, unless the Holder shall have consented in writing to such reduction and
provided the Issuer with a written waiver of its right to receive fractional
shares or interests in accordance with this paragraph. If the Holder shall
exercise more than one Warrant in the same transaction, any payment in respect
of fractional shares (or other fractional interests) shall be based on the final
fraction resulting from aggregating all such exercises.

         (h)      The Issuer hereby agrees at all times to keep reserved for
issuance and delivery upon exercise of this Warrant such number of its
authorized but unissued shares (or treasury shares) of Preferred Stock or other
securities of the Issuer from time to time issuable upon exercise of this
Warrant as will be sufficient to permit the exercise in full of this Warrant.
All such shares and other securities shall be duly authorized and, when issued
upon such exercise, shall be validly issued, fully paid and non-assessable, free
and clear of all liens, security interests, charges and other encumbrances or
restrictions on sale (except to the extent of any applicable provisions set
forth in the Issuer's Fundamental Documents) and free and clear of all
preemptive or similar rights.

         (i)      If the issuance of any shares of Preferred Stock or other
securities required to be reserved for purposes of the exercise of this Warrant
requires the registration with, or approval of, any governmental authority or
requires listing on any national securities exchange or national market system
before such shares or other securities may be so issued, the Issuer shall at its
expense use its best efforts to cause such shares to be duly registered,
approved or listed, as the case may be, so that such shares or other securities
may be issued in accordance with the terms hereof; provided, however, that this
provision shall not obligate the Issuer to register such shares

                                       5

<PAGE>

or other securities under the Securities Act or qualify them under state
securities or blue sky laws.

         SECTION 3. Transfer, Division and Combination.

         (a)      This Warrant, all rights hereunder and any Warrant Stock
issued or issuable upon exercise hereof are assignable and transferable, at any
time in whole or in part, to any Person or Persons, subject in all cases to the
restrictions set forth in the legend to this Warrant. Any such transfer shall
not require the consent of any security holder of the Issuer.

         (b)      Upon a transfer permitted by Section 3(a), this Warrant shall
be transferable upon surrender of this Warrant to the Issuer, together with a
written assignment of this Warrant substantially in the form of Annex B attached
hereto, duly executed by the Holder hereof or such Holder's agent or attorney.
Upon such surrender, the Issuer shall, without charge, execute and deliver a new
Warrant or Warrants in the name of the assignee or assignees (and, if the
Holder's entire interest is not being assigned, in the name of the Holder), and
in the denominations specified in such instrument of assignment, and this
Warrant shall promptly be canceled.

         (c)      This Warrant may be exchanged for, or combined with, other
Warrants upon presentation of this Warrant and any other Warrants with which
this Warrant is to be combined to the Issuer, together with a written notice
specifying the denominations in which a new Warrant or Warrants are to be
issued, signed by the Holder. The Issuer shall execute and deliver a new Warrant
or Warrants to the Holder in exchange for the Warrant or Warrants to be divided
or combined in accordance with such notice.

         (d)      The Issuer shall maintain books for the registration and
transfer of the Warrants, and shall allow each Warrant Holder to inspect such
books at such reasonable times as such Holder shall request.

         SECTION 4. Adjustments.

         (a)      Dividends and Distributions. If at any time on or after the
Effective Date the Issuer shall pay any dividend or make any other distribution
to holders of its Preferred Stock of any cash, evidence of indebtedness or other
property (including any rights or warrants to purchase any securities of the
Issuer) of any nature whatsoever (other than as contemplated by subsection (b)
of this Section 4), the Issuer shall at the same time pay or distribute to the
Holder (whether or not the Holder exercises this Warrant) the cash, evidence of
indebtedness or other property the Holder would have been entitled to receive if
such Holder had exercised this Warrant immediately prior to the record date for
such dividend or distribution.

         (b)      Subdivisions and Combinations. If at any time the Issuer shall

                  (i)      take a record of the holders of its Preferred Stock
for the purpose of entitling them to receive a dividend or other distribution of
Preferred Stock;

                  (ii)     subdivide, split or reclassify its outstanding shares
of Preferred Stock into a larger number of shares of Preferred Stock; or

                                       6

<PAGE>

                  (iii)    combine its outstanding shares of Preferred Stock
into a smaller number of shares of Preferred Stock;

then immediately after the occurrence of any such event (A) the number of shares
of Preferred Stock issuable upon exercise of this Warrant shall be adjusted so
as to equal the number of shares of Preferred Stock such holder would have held
immediately after the occurrence of such event (in the case of an event referred
to in clause (i), after giving effect to such dividend or distribution) if such
holder had exercised this Warrant immediately prior to the occurrence of such
event and (B) the Exercise Price shall be adjusted to be equal to (x) the
Exercise Price immediately prior to the occurrence of such event multiplied by
(y) a fraction (1) the numerator of which is the number of shares of Preferred
Stock issuable upon exercise of this Warrant immediately prior to the adjustment
in clause (A) and (2) the denominator of which is the number of shares of
Preferred Stock issuable upon exercise of this Warrant immediately after the
adjustment in clause (A).

         (c)      Merger, Consolidation or Disposition of Assets. If the Issuer
shall merge, consolidate or effect a share exchange with another entity, or
shall sell, transfer or otherwise dispose of all or substantially all of its
assets to another entity and pursuant to the terms of such merger,
consolidation, share exchange or disposition of assets, cash, shares of
Preferred Stock or other securities of the successor or acquiring entity, or
property of any nature is to be received by or distributed to the holders of
Preferred Stock of the Issuer, then the Holder shall be entitled to receive upon
the exercise of this Warrant in accordance with its terms, in respect of the
Warrant Stock issuable upon exercise of this Warrant, and upon delivery to the
Issuer or the Issuer's successor, as applicable, of this Warrant for
cancellation, the amount of cash, shares of Preferred Stock, other securities or
other property that it would have been entitled to receive if such Holder had
exercised this Warrant in full immediately prior to the occurrence of such
merger, consolidation, share exchange or disposition of assets. In the case of
any such merger, consolidation, share exchange or disposition of assets, the
successor or acquiring entity (and any Affiliate thereof issuing securities)
shall expressly assume the due and punctual observance and performance of each
and every covenant and condition of this Warrant to be performed and observed by
the Issuer and all of the obligations and liabilities hereunder, subject to such
modifications as may be deemed appropriate (as determined by resolution of the
Board) in order to provide for adjustments of the Warrant Stock issuable upon
exercise of this Warrant that shall be as nearly equivalent as practicable to
the adjustments provided for in this Section 4. The foregoing provisions shall
similarly apply to successive mergers, consolidations, share exchanges and
dispositions of assets.

         (d)      Capital Reorganization or Capital Reclassification. If the
Issuer shall effect any capital reorganization or any reclassification of its
capital stock (other than a change in par value or from par value to no par
value or from no par value to par value or as a result of a stock dividend or
subdivision, split-up or combination of shares), then in each case the Issuer
shall cause effective provision to be made so that this Warrant shall be
exercisable for the kind and number of shares of stock, other securities, cash
or other property to which a holder of the Warrant Stock deliverable upon
exercise of this Warrant would have been entitled upon such reorganization or
reclassification and any such provision shall include adjustments in respect of
such stock, securities or other property that shall be as nearly equivalent as
may be practicable to the adjustments provided for in this Section 4 with
respect to this Warrant.

                                       7

<PAGE>

         (e)      Notice of Certain Corporate Action. If the Issuer shall
propose (i) to pay any dividend to the holders of its Preferred Stock or to make
any other distribution to the holders of its Preferred Stock; (ii) to offer to
the holders of its Preferred Stock rights to subscribe for or to purchase any
additional shares of Preferred Stock; (iii) to effect any reorganization or
reclassification of its Preferred Stock; (iv) to otherwise issue any Preferred
Stock; (v) to effect any other capital reorganization; (vi) to effect any
consolidation, merger or share exchange or any sale, transfer or other
disposition of all or substantially all of its assets; or (vii) to effect the
liquidation, dissolution or winding up of the Issuer, then, in each such case,
the Issuer shall give to the Holder a notice of such proposed action, which
shall specify the date on which a record is to be taken for the purposes of such
dividend, distribution or rights offer, or the date on which such
reclassification, issuance, reorganization, consolidation, merger, share
exchange, sale, transfer, disposition, liquidation, dissolution or winding up is
to take place and the date of participation therein by the holders of Preferred
Stock, if any such date is to be fixed, and shall also set forth such facts with
respect thereto as shall be reasonably necessary to indicate the effect of such
action on the Preferred Stock, and the number of shares of Warrant Stock that
are issuable upon exercise of this Warrant after giving effect to any adjustment
that will be required as a result of such action. Such notice shall be so given
in the case of any action covered by clause (i) or (ii) above at least 10 days
prior to the record date for determining holders of the Preferred Stock for
purposes of such action, and in the case of any other such action, at least 10
days prior to the date of the taking of such proposed action.

         (f)      No Impairment. The Issuer will not, by amendment of its
Certificate of Incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms to be observed or performed hereunder by the Issuer, but will at all
times in good faith assist in the carrying out of all the provisions of this
Section 4 and in the taking of all such action as may be necessary or
appropriate in order to protect the exercise rights of the Holder against
impairment.

         (g)      Miscellaneous. The computations of all amounts under this
Section 4 shall be made assuming all other anti-dilution or similar adjustments
to be made to the terms of all other securities resulting from the transaction
causing an adjustment pursuant to this Section 4 have previously been made so as
to maintain the relative economic interest of this Warrant vis a vis all other
securities issued by the Issuer.

         SECTION 5.

         Notwithstanding any other provision in this Warrant to the contrary, on
the earlier to occur of (i) an "Event of Conversion," as such term is defined in
the Company's Certificate of Designations for Series A Convertible Preferred
Stock and (ii) December 31, 1999, this Warrant shall no longer be exercisable
for shares of Preferred Stock, but shall instead be exercisable for an equal
number of shares of Common Stock.

         SECTION 6. Miscellaneous.

         (a)      Office of Issuer. So long as this Warrant remains outstanding,
the Issuer shall maintain an office in the continental United States where the
Warrants may be presented for

                                       8

<PAGE>

exercise, transfer, division or combination as provided in this Warrant. Such
office shall be at its principal executive offices unless and until the Issuer
shall designate and maintain some other office for such purposes and give notice
thereof to the Holder.

         (b)      Notices Generally. Any notices and other communications
pursuant to the provisions hereof shall be sent in accordance with the
provisions of Section 16 of the Registration Rights Agreement.

         (c)      Governing Law. This Warrant shall be governed by and construed
in accordance with the laws of the State of California without regard to its
conflicts of laws rules. The Issuer agrees that it may be served with process in
the State of California and any action for breach of this Warrant may be
prosecuted against it in the courts of such State or any Federal court located
in such State.

         (d)      Limitation of Liability. Except as otherwise provided herein,
this Warrant does not entitle the Holder to any voting rights or other rights of
a shareholder of the Issuer, as a shareholder. No provision hereof, in the
absence of affirmative action by the Holder to purchase shares of Preferred
Stock, and no mere enumeration herein of the rights or privileges of the Holder,
shall give rise to any liability of the Holder for the Exercise Price or as a
shareholder of the Issuer, whether such liability is asserted by the Issuer, by
any creditor of the Issuer or any other Person.

         (e)      Loss or Destruction of Warrant. Upon receipt by the Issuer of
evidence satisfactory to it (in the exercise of its reasonable discretion) of
the loss, theft, destruction or mutilation of this Warrant and (in the case of
loss, theft or destruction), if requested by the Issuer, of reasonably
satisfactory indemnification, or (in the case of mutilation) upon surrender and
cancellation of this Warrant, the Issuer shall, without charge, execute and
deliver a new Warrant exercisable for the same amount of Warrant Stock;
provided, however, that (in the case of loss, theft or destruction) no indemnity
bond shall be required unless the Issuer has a class of securities registered
pursuant to the Securities Exchange Act of 1934, as amended, and the Issuer's
transfer agent requires such indemnity bond as a condition to the issuance of a
new Warrant.

         (f)      Amendments and Waivers. Any provision of this Warrant may be
amended or waived if, and only if, such amendment or waiver is in writing and
signed by the Issuer and the Holder and, in the case of a waiver, by the party
against whom the waiver is to be effective. No failure or delay by either party
in exercising any right, power or privilege hereunder shall operate as a waiver
thereof nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
The rights and remedies herein provided shall be cumulative and not exclusive of
any rights or remedies provided by law.

                                       9

<PAGE>

                                      * * *

         IN WITNESS WHEREOF, the Issuer has duly executed this Warrant.

Dated: October 24, 1997

                                               DIGITAL THEATER SYSTEMS, INC.

                                               By:  /s/ Jon E. Kirchner
                                                  ------------------------------
                                                        Name:  Jon E. Kirchner
                                                        Title: VP/CFO

                                       10

<PAGE>

                                                                         ANNEX A

                             FORM OF EXERCISE NOTICE

                (To be executed by the registered holder hereof)

         The undersigned registered owner of this Warrant exercises this Warrant
for the purchase of ________ shares of Preferred Stock of Digital Theater
Systems, Inc., a Delaware corporation, and herewith makes payment therefor of
$__________ (such payment being made [check one] (x) [ ] in cash or by certified
or official bank check or (y) [ ] by acceptance of a reduced number of shares of
Preferred Stock upon cancellation of this Warrant as provided in Section 2(b) of
this Warrant, all on the terms and conditions specified in this Warrant, and
requests that (i) certificates and/or other instruments covering such shares of
Preferred Stock be issued in accordance with the instructions given below and
(ii) if such shares of Preferred Stock shall not include all of the shares of
Preferred Stock to which the Holder is entitled under this Warrant, that a new
Warrant for the unpurchased balance of the shares of Preferred Stock issuable
hereunder be delivered to the undersigned. References in this Exercise Notice to
"Preferred Stock" shall include other securities or other property to the extent
included in Warrant Stock.

         [This Exercise Notice is being delivered contingent upon the
consummation of [describe transaction] as contemplated by Section 2(d) of this
Warrant].(1)

Dated:_______________________________

                                             ___________________________________
                                             (Signature of Registered Holder)(2)

Instructions for issuance and
registration of shares of
Preferred Stock:

__________________________                              Social Security or Other
Name of Registered Holder                    Identifying Number:________________

Please deliver certificate to the following
address:

____________________________________
Street

____________________________________
City, State and Zip Code

------------------------------------------------
(1)      Include if applicable.

(2)      The signature must correspond with the name as written upon the face of
         the attached Warrant in every particular, without alteration.

                                       11

<PAGE>

                                                                         ANNEX B

                               FORM OF ASSIGNMENT

                (To be executed by the registered holder hereof)

         FOR VALUE RECEIVED the undersigned registered owner of this Warrant
hereby sells, assigns and transfers unto the assignee named below all the rights
of the undersigned under this Warrant with respect to the number of shares of
Preferred Stock covered thereby set forth below to:

                                                             Number of Shares of
Name of Assignee                  Address                      Preferred Stock

References in this Exercise Notice to "Preferred Stock" shall include other
securities or other property to the extent included in Warrant Stock.

Dated:__________________________

                                             ___________________________________
                                             (Signature of Registered Holder)(1)

                                                       _________________________
                                                       Name of Registered Holder
                                                       (Please Print)

Witness:

_________________________________

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(1)      The signature must correspond with the name as written upon the face of
         the attached Warrant in every particular, without alteration.

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