Yes, that is exactly right. You can output to stream files, and simultaneously produce sector images. Though the raw streams are more useful to us that the "CT" images.
Alternatively, you can produce stream files, and produce sector images from the stream files later. It's always good to set a platform though (a sector image type, even if you don't select to output it) so you get good error checking while dumping, and so the KryoFlux software will know when to retry a track.
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