We have performed a general analysis of optical correlators with spata
l light modulators (SLM's) whose primary defect is a finite contrast r
atio (CR). Our mathematical analysis identifies three noise terms that
appear in addition to the correlation term. The filter SLM contains e
ither a phase-only filter (POF) or a binary-phase-only filter (BPOF).
Insertion of a de block at the center of the filter SLM decreases the
noise background in the correlator plane; this de block is larger than
that required for the same level of performance in a correlator whose
SLM's have transmissive (or reflective) dead zones. With a noise-free
input and the de block, our computer simulations that show the peak i
ntensity falling off as the CR decreases are in quantitative agreement
with the correlation term of the mathematical model. For a cluttered,
disjoint noise input this agreement is only qualitative, and at low C
R's the de block is definitely required for the BPOF correlator if the
secondary peaks in the output are to be brought below the correlation
peak.