AC3File is a DirectShow source filter. It is required to read any kind of AC3 or DTS files. Without AC3File media player cannot open raw files.
There are many kinds of AC3 and DTS files. Some files are ripped from AC3/AudioCD or DTS/AudioCD, some files are from DVD in PES container some files may have different byte order. All of these files are supported by AC3File.
Just download the latest version and run the installer.
AC3File will be associated with .ac3 and .dts files automatically.
AC3File is used automatically by DirectShow players (see a list of compatible Media players). Just open AC3 or DTS file using your favorite player.
Note, that some players require own plugins. For instance, Winamp does not use DirectShow and therefore a special plugin is required (see WinampAC3).
 Media Player Classic (Home Cinema)
If you want to use AC3File in Media Player Classic, you have to disable MPC's internal AC3/DTS filter. To do this, go to menu View-> Options -> Internal filters and uncheck 'DTS/AC3'.