M4R or iPhone Ringtone is the format of ringtones for mobile devices from Apple. This is the same format as M4A but with it has several limitations. The duration of the audio stream should not exceed 40 seconds. In case the duration is longer, iTunes does not install the ringtone on the mobile device.
AC3 or Dolby AC-3 is a data format file where six audio channels are compressed by the AC3 codec, also known as Audio Codec 3. The AC3 format is used for the following audio formats - DVD, Blu-ray, cinemas and game consoles. To play the full surround sound of the AC3 file signal, you need a device that supports Dolby Digital technology.