Dolby My best advice is to not use it. Most current tape formulations allow for very low noise so Dolby is not really necessary. To my ears, Dolby B is terrible and I try not to ever use it for any reason. It kills the high frequencies and sometimes causes weird phasing or pumping problems. The problem is it only really works well when you play the tape back on the same deck it was recorded on.
Results can vary considerably when tapes are played back on other decks.
If you have a tape that already has Dolby on it the best way to copy it is to set the Dolby off on both decks. The copy will still have the dolby on it and will need Dolby engaged when playing it back. Most people don't want Dolby on their tapes though so most of the time you will decode the dolby on your play deck and then record without Dolby. Some dubbing decks will not let you do this. Multiple encoding and decoding of Dolby will make the sound worse and should be avoided.