So I noticed Ammo is a lot more descriptive in Fallout 2 (which is nice, because in a game of numbers I need to actually see what things specifically do).

For the Damage Reduction section of ammo descriptions, does the Damage Reduction refer to Damage Threshold, Damage Resistance, or both?

If it refers to Damage Resistance or both, is the % value shown on the ammo additive or multiplicative? (If it's additive it would be added to the Damage Resistance % before damage is reduced by a percentage; if it's multiplicative then it would reduce the damage based on a total, either before or after Damage Resistance is applied.)

EDIT: Also, if it's additive, is the additional DR added even to unarmored foes, whether the modifier is positive or negative? (Can a negative DR ammo modifier reduce Damage Reduction below 0%, increasing damage?)

Thanks for the answer, squid830.

Damage Reduction, referring to the ammo Damage Reduction %, seems to be RM.

It is added to the already existing Damage Resistance of the target you're shooting.

I don't have very advanced math skills, but I believe "(100 - max((ADR/max(5*AI,1) + RM),0) / 100" means that Damage Resistance + Damage Reduction cannot increase damage (in regards to the hypothetical that FMJ/AP rounds could reduce Damage Resistance to BELOW 0%). Also, if I understand correctly, the Damage Reduction is added even to totally unarmored targets.
-Please correct me if I'm wrong. I'm not super confident.

(I should note that unless I'm totally derping, this formula is missing a closing parenthese.

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ND = net damage value
RD = random damage value produced from weapons hit damage range
RB = ranged bonus (RB=0 unless the player has Bonus Ranged Damage perk)
X = ammo damage multiplier
Y = ammo damage divisor
CM = critical hit damage multiplier (if no critical hit then CM=2, otherwise assigned value from critical hit table)
CD = combat difficulty multiplier (Easy=75, Normal=100, Hard=125)
AI = 1 if critical hit which ignores armor, otherwise 0
ADT = armor damage threshold value
ADR = armor damage resistance value
RM = ammo resistance modifier (only value allowed to be negative or positive in the equation)

Original:
ND = ((RD+RB) × (X/Y) × (CM/2) × (CD/100) - ADT/max(5*AI,1)) × (100 - max((ADR/max(5*AI,1) + RM),0) / 100

ND then rounded to nearest whole number