It's easy. First you pay at Ban Reservas (can't remember how much). You also need a Certificate of Good Conduct. Take them with your cedula to the local test centre and they give you a booklet which tells you the "rules" of the road. You get an appointment and then you do a "theory" test which is multiple choice on a computer (in Spanish, of course). The answers are pretty obvious, especially if you have had a look at the booklet. They also give you an eye test. After, I think, four weeks you go back and do a practical test which, in my case involved driving once around the Puerto Plata baseball stadium in a little car they provided. It was automatic, and I wanted to be allowed to drive a manual, so I told them so and my licence duly stated that I could drive all types.
There are a couple of examples of the theory test on YouTube, to give you an idea.
I did this three years ago, but I doubt it has changed much.