“Audio-frequency transformers are used mainly for matching impedances and transmitting audio frequencies. They also provide isolation from direct currents and present balanced impedances to lines or circuits.” (cited from Reference Data for Engineers: Radio, Electronics, Computers and Communications from Wendy Middleton, Mac E. Van Valkenburg)
In other words, they are most commonly used for two purposes: One is the isolation between two sections of an electric system which have different ground levels and another one is to change voltage levels (as is typical for tube circuits for example).
But whats that special about those “simple” electrical components that some folks are linking almost mythical sonic abilities to them? Remember, a transformer is basically just a piece of iron with two wires winded around – so what makes that so special? Bill Whitlock (Jensen Transformers, Inc.) said in the Handbook For Sound Engineers: “Although a transformer is not a complex device, considerable explanation is required to properly understand how it operates.” and it even gets worse since not all effects can be explained just by looking at the transformer itself but this topic requires a deeper look into the circuits around which causes the load to the transformer.
As a matter of fact, audio distortion in transformer cores can really sound ugly and when an audio-frequency transformer has been built much efforts has been spent already into making it as linear as possible by the technical designer for sure. Already back in 1939 Norman Partridge (Partridge Transformers Ltd.) had published some great articles about the circumstances of transformer core distortion, their measurements and how to minimize such distortions by proper design. Such literature is a great resource to get a deeper understanding on what that distortion actually is and what is going on when current flows through such a device.
to be continued