This paper outlines the principles behind a SONAR system which uses ACVD (auto by cross-correlation with variable delay lines) beamforming in order to minimise the cost of three-dimensional imagery. The proposed system uses a twin perpendicular axis disc arrangement, which enables two or more hydrophones to be moved relative to each other in three dimensions. This produces the controllable phase lags required for ACVD beamforming. The ranging of the system is carried out in a manner essentially similar to conventional sector scanning systems where the round-trip times for acoustic pulses are measured. The operation of an ACVD system is described using diagrams and computer simulations where appropriate. The advantages and disadvantages of ACVD compared to conventional techniques are commented upon.