It should be the very last step in your mastering chain.

Advanced tools like iZotope's MBIT+ use psychoacoustic methods to shift this added noise into frequencies the human ear is less sensitive to, making the audio sound cleaner. 2. Astrophotography

In audio, dithering is the process of adding a minute amount of random noise to a signal to mask "quantization distortion". This is essential whenever you reduce the of a file (e.g., from 32-bit to 16-bit for CD or streaming).

Without it, quiet fades or low-level signals may sound "choppy" or cut off abruptly due to rounding errors.

For telescope imaging, dithering involves making tiny, random shifts in the telescope's position between exposures. Calculate & Setup Dithering In PHD2 & NINA