In its original formulation, DCM was based on bilinear equations, where the bilinear  term models the effect of experimental manipulations on neuronal interactions. The bilinear framework, however, precludes an important aspect of neuronal interactions that has been established with invasive electrophysiological recording studies; i.e., how the connection between two neuronal units is enabled or gated by activity in other units. These gating processes are critical for controlling the gain of neuronal populations and are mediated through interactions between synaptic inputs (e.g. by means of voltage-sensitive ion channels). They represent a key mechanism for various neurobiological processes, including top-down (e.g. attentional) modulation, learning and  neuromodulation. We have developed a nonlinear extension of DCM that models such processes (to second order) at the neuronal population level. In this way, the modulation of network interactions can be assigned to an explicit neuronal population.
 
K.E. Stephan, L. Kasper, L.M. Harrison, J. Daunizeau, H.E.M. den Ouden, M. Breakspear, K.J. Friston. Nonlinear Dynamic Causal Models for fMRI. NeuroImage 42: 649-662, 2008.
 
These descriptions of the new features are taken from the SPM8 Release Notes
 
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