Theory of a dual rotating polarizer and analyzer ellipsometer is presented in this paper. This instrument with doubly modulated optical signal is designed to perform generalized ellipsometry optical characterization of anisotropic layered systems. In this study, i) configuration of the instrument, ii) calculation of optical signal, iii) processing of the signal to extract Fourier coefficients and then generalized angles, and iv) calibration procedures are presented in details. (C) 2013 Elsevier B.V. All rights reserved.