Dollar theaters are just like any other theater, except the price of admission is $1 or less. Here, it's 50 cents for a matinee. They play movies that are no longer playing at the regular theaters. Sometimes they've been released on dvd already, sometimes they haven't. The one here usually gets them right before dvd release, but they'll keep major productions (like Harry Potter) even when they're already out on dvd.
I like the smell of it, but my allergies and I don't always agree.