From an interview with Dunn by David Everitt for the excellent book Film Tricks – Special Effects in the Movies the optical wizard described RKO as being “a tight knit corporate family that placed great importance on cooperation between departments”.  Everitt writes that although the Shadow Dance was such a team effort, effects chief Walker gave all the credit to Dunn for the classy execution of the sequence since it was Dunn who put together all of the elements in the optical printer.

As Dunn explained to author Everitt “The first images filmed were the shadows. Astaire danced in front of a blank screen while a sun arc lamp cast his sillouette.  “Once one of the shadows had been photographed and isolated, Astaires’ foreground dancing could be filmed to coincide with the shadows steps.  To do this, Astaire was positioned in front of a blank screen once more with the processed footage of the dancer’s shadow projected off screen while the camera rolled so that Astaire could keep an eye on the shadow’s movements and time his new dance steps accordingly.  Now the effects crew had one shot of Astaire and another shot of his shadow  -the two figures dancing complementary parts of the same routine.  Dunn’s printer handled the rest.  The shadow was printed three times to make a sillouette dance line of three dancers, and over this image was printed the foreground footage of Astaire by means of a travelling  matte”.  Author Everitt continues “The different elements were precisely coordinated to create a complex interaction between the dancer and the shadows to his rear”. source http://nzpetesmatteshot.blogspot.com