The Computer Animation Production System (CAPS) was a digital ink and paint system used in animated feature films, the first at a major studio, designed to replace the expensive process of transferring animated drawings to cels using India ink or xerographic technology, and painting the reverse sides of the cels with gouache paint. Using CAPS, enclosed areas and lines could be easily colored in the digital computer environment using an unlimited palette. Transparent shading, blended colors, and other sophisticated techniques could be extensively used that were not previously available.
The completed digital cels were composited over scanned background paintings and camera or pan movements were programmed into a computer exposure sheet simulating the actions of old style animation cameras. Additionally, complex multiplane shots giving a sense of depth were possible. Unlike the analog multiplane camera, the CAPS multiplane cameras were not limited by artwork size. Extensive camera movements never before seen were incorporated into the films. The final version of the sequence was composited and recorded onto film. Since the animation elements existed digitally, it was easy to integrate other types of film and video elements, including three-dimensional computer animation.
CAPS was a proprietary collection of software, scanning camera systems, servers, networked computer workstations, and custom desks developed by The Walt Disney Company together with Pixar in the late-1980s. It succeeded in reducing labor costs for ink and paint and post-production processes of traditionally animated feature films produced by Walt Disney Animation Studios. It also provided an entirely new palette of digital tools for the film-makers.
The Computer Graphics Lab at the New York Institute of Technology (NYIT) developed a "scan and paint" system for cel animation in the late 1970s. It was used to produce a 22-minute computer-animated television show called Measure for Measure. Industry developments with computer systems led Marc Levoy of Cornell University and Hanna-Barbera Productions to develop a video animation system for cartoons in the early 1980s.
The first usage of the CAPS process was Mickey standing on Epcot's Spaceship Earth for "The Magical World of Disney" titles. The system's first feature film test was in the production of The Little Mermaid in 1989 where it was used in a single shot of the rainbow sequence at the end of the film. After Mermaid, films were made completely using CAPS; the first of these, The Rescuers Down Under, was the first 100% digital feature film ever produced. Later films, including Beauty and the Beast, Aladdin, The Lion King, and The Hunchback of Notre Dame took more advantage of CAPS’ 2D and 3D integration.  
In the early days of CAPS, Disney did not discuss the system in public, being afraid that the magic would go away if people found out computers were involved. Computer Graphics World magazine, in 1994, was the first to have a look at the process.
CAPS was capable of a high level of image quality using significantly slower computer systems than are available today. The final frames were rendered at a 2K digital film resolution (2048 pixels across at a 1.66 aspect ratio), and the artwork was scanned so that it always held 100% resolution in the final output, no matter how complex the camera motion in the shot. Using the Pixar image computer, images were stored at 48-bits per pixel. The compositing system allowed complex multi-layered shots that was used almost immediately in The Rescuers Down Under to create a 400-layer opening dolly shot. The DALS system made use of one of the first large-scale, custom RAID systems in the film industry.
Following the box office under-performance of films such as Treasure Planet in 2002 and Home on the Range in 2004, Disney Feature Animation's management team (like DreamWorks Animation) were convinced that audiences much favored 3D computer animated features and closed down their traditional 2D animation department (until 2007 when Lasseter stepped in as the studio's new head of management and called for its reopening). The CAPS desks were removed and the custom automated scanning cameras were dismantled and scrapped. As of 2005, only one desk system remained (and that was only for reading the data for the films that were made with CAPS).
Since the merger with Pixar, as most of the CAPS system was discontinued, Disney's subsequent traditionally animated productions; How to Hook Up Your Home Theater (2007), The Princess and the Frog (2009), The Ballad of Nessie (2011), and the Winnie the Pooh (2011), were produced using Toon Boom Harmony computer software, which offered a more up-to-date digital animation system.
December 1991 Although 3D graphics debuted in earlier Disney animations, Beauty and the Beast is the first in which hand-drawn characters appear in a 3D background. Every frame of the film is scanned, created, or composited within Disney's computer animation production system (CAPS) co-developed with Pixar. (Premiere: (11/91)
DECEMBER 1991: Beauty and the Beast is the first Disney film with hand-drawn characters in a 3D background. Every frame is scanned, created, or composited within CAPS.
(Computer Animation and Production System used for animated motion picture The Lion King)