Oh, it's hard to believe it. The reason to own Recycle, that *ahem* older once-miracle of modern sampling has now past. No longer do you need to encode audio files in another application, outside of Reason. Now, you can convert audio files within Reason, into Rex files. Which, of course, are the loop files that Dr. Octo Rex eats for breakfast.
So, why, with Reason's amazing time stretching ability would this feature even be relevant? Well, if you've ever gone into the editor of Dr. Octo Rex, and have actually messed around with features like the Amp envelope, Filter envelope, or you've applied an LFO to a loop. Or, if you've ever modified the pan, pitch, or filter frequency of individual slices within a REX file... Well, you know you can take loops to a very different place.
In short, REX files are still amazing, relevant and because you can now easily create your own REX files life has gotten much better.
So, how do you do it?
Step 1 - Create a Beat
Though there are other ways to do this, let's go about it with some drums from Reason first. After all, Dr. Octo Rex is really into drum loops, right? Create a Redrum drum machine, and load up your favorite kit. Once this has been accomplished, create a nice beat that you enjoy.
Step 2 - Create an Audio File
Now that you have a beat, let's convert it to audio. First, in the Sequencer page, set your loop locators to 1-2 measures apart...
Go to the File > Bounce Mixer Channels...

In the Bounce Mixer Channels page, check Redrum 1 as your selected channel. Set your Range to Bounce as Loop, this will keep the length short for Dr. Octo Rex. Finally, select New tracks in song with the Mute Original Channels checkbox ticked and hit OK. This will put the audio file in your sequencer, and mute the original Redrum channel, so that you don't have overlap.
Once the bounce is complete, you'll have a nice little audio file in your sequencer, waiting to be converted.
Step 3 - Convert Audio to Rex
Now that you have an audio file to work with, let's make it REX! Double-click on the audio file to go into Edit Mode...
In this mode, you can eliminate slice markers, or add them. These are the markers that will be used to slice up the different transients within the loop. You can use the pencil tool to add markers. To delete a marker, select it and press the delete button. Once you're feeling good about your audio file, right-click on it and select Bounce > Bounce Clip to New REX Loop.
Step 4 - Get it to the Dr.
Once the REX bounce is complete, you'll see the new REX file in the Tool window. The next part is easy. Press the To Rack button.

What happens next is really cool. A Dr. Octo Rex will be created with your loop placed snuggly inside...
And there you have it! Instant REX loop! You can use this feature to create an amazing library of REX files of your own.
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