The hybrid optoelectronic processor, presented in this paper, realizes the dual nonlinear correlation (DNC) in a set-up based on a two-step nonlinear joint transform correlator architecture. In the first step three power spectrum distributions (input scene power spectrum, reference target power spectrum, and the joint power spectrum) necessary for the nonlinear processing are captured with a CCD camera. Nonlinear modification of the joint power spectrum, which does not have to be symmetrical in the input and reference channels, is introduced digitally. In the second step, the modified joint power spectrum is Fourier transformed optically. Numerical analysis of this processor shows a crucial influence of the dynamic range and the limited number of grey levels of the CCD camera during image acquisition in the first step, on the output signal parameters and the discrimination capability of the set-up. Optical results of recognition obtained for noise-free segmented input scenes show that the set-up enables the realization of various correlation operations as CMF, POF, IF, PPC, etc. without any filters and that the discrimination capability is easy to control by a proper selection of the type of nonlinear processing.