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I found this particular bit at the end of The Last Jedi pretty confusing. I've only seen the movie twice so my recollection may be off, but as far as I can remember:

What's left of the Resistance decide to abandon their remaining cruiser in smaller shuttles, and head towards the old rebel base on Crait. I'm pretty sure someone mentions cloaking the shuttles so they can't be seen by the First Order (which makes sense). However, not only are they still physically visible to Admiral Holdo ("Godspeed, Rebels"), the First Order also manage to detect where they are and blast them to pieces.

Were these ships cloaked or not? If so, how could Holdo see them, and how could the First Order detect where they were? Also:

If the First Order have de-cloaking technology then what is the point of cloaking ships in the first place?

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    About cloaked versus invisible, when people detect ships (in Star Wars and real life) it's not by sight (no one is peeking out of a window to try and find ships), it's through technology (in real life maybe Sonar or Radar). So generally when a large craft is "cloaked" it means it's invisible to those technologies. You seem to be thinking "invisible to the naked eye", but even if something invisible through light it could be seen other ways, like heat vision or something. Commented Dec 19, 2017 at 13:53
  • In the Clone Wars TV series (still considered canon by Disney, I believe) cloaked ships are indeed invisible to the naked eye. A similar treatment for cloaking has also been used in SW comics. The precedent had been set. TLJ subverted it for no real reason: the movie would have played out exactly the same way had the ships actually been invisible to the naked eye. Commented Dec 19, 2017 at 14:50
  • I wasn't aware, but even so it's possible that multiple forms of cloaking exist and they refer to them all colloquially as "cloaking". I wouldn't say they subverted it. Commented Dec 19, 2017 at 16:51

4 Answers 4

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DJ, “a” code breaker, sold out the Resistance.

The ships were originally cloaked as you’d thought, and the resistance was happily escaping to the mineral planet of Crait, the First Order would’ve flown overhead and our mighty heroes would’ve been safe.

However, Poe, Finn and Rose decided to find this code breaker and destroy the tracking. Unfortunately, they got the wrong one and the one they got was a sell out. He sold himself out to the First Order, told them about the cloaked ships (that he’d overheard in a communication between Poe and Finn) and got a large payment of money.

So it was DJ, the dodgy code breaker, that informed the resistance and got the Resistance fleet shot.

It is possible that the First Order required the code breaker’s knowledge to de-cloack the ships, but even if they didn’t, they wouldn’t have expected to look for those transport ships.

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    Unfortunately, they got the wrong one did they? It was never explicitly said, but I had the feeling that DJ was the person they were looking for (and the guy with the broach had possible stolen or won it from DJ). After all Maz said there was only one person who could get them on to the first order's ship. Commented Dec 18, 2017 at 16:38
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    @MattBurland See scifi.stackexchange.com/q/176583/51226
    – Rogue Jedi
    Commented Dec 18, 2017 at 17:20
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    It's pretty clear that DJ provided the First Order the information they needed to find the fleeing cloaked Resistance ships. However, it's not clear how DJ acquired that information, since as far as we know neither Finn nor Rose knew about the plan (since Poe certainly didn't). Two options: Either Finn and Rose told DJ about the cloakable shuttles (since they used one to get to Canto Bight) or DJ found information on the stolen ship indicating the Resistance had been sold cloakable shuttles. Commented Dec 18, 2017 at 18:17
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    @jeffronicus Or DJ, being quite a prolific hacker and cracker, descrambled the stealth signature without much trouble. He was able to scramble the shield signature of Snoke's capital ship with a slicing chip he happened to have lying around, after all.
    – TylerH
    Commented Dec 18, 2017 at 21:33
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    @algiogia They were a long distance away, and if you've watched any Star Wars film, most of the time crew manning the ship is looking at radar and things on screen, not out the window... This, again, isn't a plot hole. The logic fits perfectly with everything established in Star Wars canon.
    – Edlothiad
    Commented Dec 19, 2017 at 12:09
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They didn't visibly cloak (I mean, we see them on the screen). Instead, they had some sort of cloak that prevented them from being detected.

When DJ tells the First Order what the Rebel's plan is, they ran a "de-cloaking scan", which detected the ships.

The implications are that the First Order runs some sort of normal scans that can be thwarted in some fashion, but they need to run a special scan to detect the cloaked ships.

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    This was my thought as well; just like we have stealth technology today, that typically doesn't mean 'invisibility cloak' a la Harry Potter... it means special paint coatings, physical design angles, active RADAR scrambling, etc.
    – TylerH
    Commented Dec 18, 2017 at 21:34
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    I believe I recall the rebels saying that the First Order wouldn't be looking for ships this small when they explain the evacuation plan. My assumption was that the cloaking tech just reduced their scanner presence without affecting the ships visual appearance (possibly even something like just shielding the engines from detection, relying on the FO setting their scanners to ignore passive blobs of metal as small as transports to filter out battle debris)
    – Ben
    Commented Dec 19, 2017 at 1:06
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    There is a clone wars TV series episode with an experimental ship with a cloaking device. In that episode it's clear that the cloak functions like a Harry Potter invisibility cloak too, hiding it visually. Commented Dec 29, 2017 at 17:16
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    @ScottWhitlock Yeah, but that's not what they used here. The ships were still visible. In Legends(Heir to the Empire), there was a true cloaking device as well.
    – Machavity
    Commented Dec 29, 2017 at 17:21
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I've only seen the film twice, but I recall that after DJ (the character played by Benicio Del Toro) reveals the Resistance's plan, an officer tells Hux that they ran a "de-cloaking scan" to reveal the shuttles. Either the First Order has tech the Resistance doesn't know about (like the ability to track through light speed), or a de-cloaking scan is something they wouldn't normally do, perhaps like the difference between a submarine using passive vs. active sonar.

Remember, Poe thinks it's suicide to leave the cruiser, and the First Order must think so, too, which is why they weren't paying attention to smaller craft.

I also think the cloaking refers to instruments only. The First Order was too far away to see the shuttles with the naked eye, so they would have to rely on scans to see them. That explains (in my mind, at least) why Holdo (and the camera) could see the ships with the naked eye.

There is probably too much speculation for this to be an accepted answer, but that's how I resolve this question in my mind, so I can ponder all the others. :-)

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Yes, they did cloak the ships.

if the First Order have de-cloaking technology, then what is the point of cloaking ships in the first place?

The point was to reach Crait in the shadow of distraction (remember, First Order was focused on the main resistance ship). Cloaked ships remained invisible to the First Order until they ran de-cloaking scan. Resistance was hoping that First Order wouldn't look for cloaked ships because it was busy pursuing their main ship.

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    It was a stupid, wishful thinking plan. It's supposed to be a stroke of genius, but it was stupid. Commented Dec 18, 2017 at 17:25
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    @ChrisB.Behrens I mean, it would have worked if the resistance hadn't been sold out.
    – Delioth
    Commented Dec 18, 2017 at 20:33
  • @Delioth though it would have been a short-lived victory, as the goal when getting to Crait was to fortify and send a distress beacon all across the galaxy. This would have been detected by the First Order pretty easily; the Rebellion's hope was that enough allies would come to their aid to help them escape the First Order. Little did they know the First Order brought tech with them to blow through the shielded door and no one would answer the Rebellion's call for help. So even if they weren't sold out, they still would have died were it not for the intervention of Rey and the ice foxes.
    – TylerH
    Commented Dec 18, 2017 at 21:37
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    @TylerH Someone made a comment about hiding there until the First Order left. I believe the original plan was that the cruiser would jump to another system, where it would be tracked and destroyed, supposedly with all hands. Which isn't to say it wasn't still a bit of a long shot, but it's not like they had any better options.
    – Ray
    Commented Dec 21, 2017 at 20:29
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    @TylerH Just got back from it. Yes, they could detect the transmission while in the same system. But earlier, the rebels stated that the plan was to wait until the First Order was gone. That plan went out the window once the transports were detected, leaving them stuck with Plan B of "call for help now and hope they get here in time". If it were possible to detect transmissions between arbitrary systems when you don't have an observer present in either one, no secret base would ever be able to send or receive messages.
    – Ray
    Commented Dec 21, 2017 at 21:30

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