Dolphins are known to primarily have sonic orientation. Their eyesight is as good as ours, but that is of little use in murky waters. Therefore they emit sound and by the echo can locate obstacles, preys and hazards like us humans.
It works similar to the tapping on the street with the red and white stick of the blind. Because in blind people the sight function is as good as absent their hearing tends to take over this faculty and thereby their sensitivity to sound develops far beyond that of people who orient themselves visually.
Exposure to danger is a cruel fact of life that can never be fully excluded and the more one is deprived of the ruling senses, the harder it is to survive.
As people who lose there eyesight can develop an astounding orientation by sound, people who are born blind are particularly equipped in this respect.
As dolphins have had to be able to deal with these contingencies from the beginning of their development as a species, millions of years before we appeared, their abilities are in a class of their own. They started off as land animals and adapted to the waters nearby, often murky rivers and lakes. Species like the Amazon, the Ganges and the Yangtze Kiang River dolphins are the ancestors with the most refined sonar abilities. From there toothed cetaceans started to extend their habitats and now we mostly know them as pelagic. These species, however, are relatively new kids on the block and their sonar, sophisticated as it may be in comparison to the toy-sized achievements of mankind, is a mere shadow of their ancestral skills.
Though dolphins can be scanning continuously, their sonar is not automatically on. As it takes energy, particularly at long ranges, they use it economically.
Pilot whales, for instance dive to a thousand metre depth to feed on squid. They do this around the time that the sun is at its highest and the rays form a “bull's eye” nearest to the perpendicular angle. This way, their journey is not only the shortest, but their sonic orientation is also less strenuous, as they get a 'free runway' facilitated by the penetration of light (±about twice as deep as the visibility distance)..
In this context the question arises whether dolphins, apart from their whistling and other sound production, also communicate with sonar. I put this question before Demise Herzing, dolphin researcher on the Bahamas: http://explore.org/interviews/denise-herzing/
Her answer:
Dolphin sounds are usually categorized into three areas: whistles, burst pulsed sounds, and echolocation clicks (sonar). Whistles are thought to be for long distance communication, burst pulsed sounds for short distance communication, and sonar for navigation and orientation. But, yes, dolphin sonar is used in a social context, from buzzing young dolphins for discipline, to sharing information about where a fish is hidden, sonar does have a communication function.
My follow-up question how a dolphin that hears the sonar produced by another dolphin, can locate something by an echo of a sound emitted from somewhere else, remains unanswered.
I do agree, however, that a sonar emission that does not need to bounce, like a buzzing for discipline or a high frequency (and therefore inaudible) stealth warning, can have a signal function. But by its nature it seems to me that direct information attained by echo-location is limited to individual reception, before it can be communicated by other means.
This also illustrates that it is hard to never stop learning if your question is not bounced by an answer.