Contrast enhancement in post — darks and highlights are pulled to the limits of the tonal range. Exploits unused histogram real estate.
On set or in the edit, you'll quickly notice: footage with flat contrast that doesn't utilize the full tonal range is the classic case for histogram stretching. The trick behind it is simple and brutally effective. You pull the darkest pixels of your material to black (0) and the brightest to white (255 for 8-bit, or the maximum values in your working space) and stretch everything in between linearly. What was previously in a narrow window between, say, 20 and 200, now uses the full range from 0 to 255. The histogram is pulled apart – hence the name.
Practically, this works in almost any grading tool: Curves, Levels, or special stretch filters. In Nuke, you use HistEQ or build it with ColorCorrect and Black/White Points. In DaVinci Resolve, you do this via the Primaries or, more quickly, via Auto-Contrast – but beware, that's often too brutal. The advantage of the manual method: you see exactly where your data lies in the histogram and can make a more intelligent decision about where the clipping points are. With HDR material, it gets more complicated – you need to be in the correct colorspace and be careful not to shoot the highlights prematurely into the stratosphere.
Where it becomes useful: footage shot under artificial light or flat daylight often has that muddy look. Historically, this was standard with old DV cameras or poor sensors. Today, it's used intentionally in color grading to quickly create micro-contrast before making other corrections. But: it's not a magic wand. If your material is inherently noisy, stretching will amplify the noise just as much – you're not pulling information out of nowhere. In very extreme cases, it will clip your shadows or highlights, which cannot be repaired later.
Pro tip: don't do it blindly. Always look at the histogram before and after. A gentle stretch of 10–15% in each direction often helps more than the full program. And if you're working with Log material (see LOG Color Space), a form of normalization is usually already integrated into the LUT – you don't need to stretch it separately.