Thermal plasma jets interact intensively with the surrounding atmosphere. This interaction leads to strong changes of the plasma jet properties affecting the resulting products. Modification of the nozzle parameters and conditions at the exit of the torch helps to vary and better control the process of plasma jet and ambient air interaction. In the present study, the DC arc plasma torch was equipped with a modified anode nozzle (M2.5) and a surrounding shroud at the jet exit. The process of air entrainment was investigated when shroud gas was supplied producing a protecting envelope to reduce the air entrainment. Schlieren photography and the enthalpy probe with the mass spectrometer were applied to study the influence on plasma jet behavior. The effect of shroud nozzle geometry as well as the effect of the shroud gas flow rate was investigated. Likewise, influence of gas shrouding on the resulting coatings was studied.