From Sega Retro

SMD is an interleaved file format created by the Super Magic Drive when it dumps a ROM. The SMD BIOS can only see 16K of cartridge ROM at once, and it's unknown why the data becomes interleaved. 68000 ROM will appear in an interleaved format, with the first 8K being the even bytes and the remaining 8K being the odd bytes of a 16K block. When reading cartridge data from the banked ROM area, or loading data into copier DRAM, the data will be in this format.

In order to edit a Genesis ROM, *.SMD files need to be converted to binary files. This can be accomplished with a number of programs. One simple method is to dump the SMD ROM from the emulator - the result will be a flat binary file. Not all emulators can do this, however.

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