Spatial hearing in dolphins is believed to be similar to that in humans. The same binaural phenomenon known for humans is used to explain sound localization in dolphins. However, the ability of a bottlenose dolphin to localize a sound in the vertical plane as accurate as in the horizontal plane appears to undermine binaural phenomenon concept in dolphin sonar. We found that directionality of the bottlenose dolphin transmit beam could account for most results on the bottlenose dolphin underwater object localization. In this paper passive localization and spatial discrimination of brief signals by a bottlenose dolphin is examined. The bottlenose dolphin was found capable of discriminating clicks with different intensity as well as a click and brief noise pulse simultaneously transmitted via transducers separated in azimuth by less than 1°. The dolphin was also able to discriminate a lead from a lag noise pulse at the transducer azimuth separation as small as 0.3°-0.4° and the lag delay as small as 20 microseconds. The results are discussed with regard to the bottlenose dolphin auditory time resolution and so called precedence effect phenomenon well known for the binaural system of humans.