Abstract. Let B be a conformal net. We give the notion of a proper action of a finite hypergroup acting by vacuum preserving unital completely positive (so-called stochastic) maps, which generalizes the proper actions of finite groups. Taking fixed points under such an action gives a finite index subnet B K of B, which generalizes the G-orbifold. Conversely, we show that if A ⊂ B is a finite inclusion of conformal nets, then A is a generalized orbifold A = B K of the conformal net B by a unique finite hypergroup K. There is a Galois correspondence between intermediate netsIn this case, the fixed point of B K ⊂ A is the generalized orbifold by the hypergroup of double cosets L\K/L.If A ⊂ B is an finite index inclusion of completely rational nets, we show that the inclusion A(I) ⊂ B(I) is conjugate to a Longo-Rehren inclusion. This implies that if B is a holomorphic net, and K acts properly on B, then there is a unitary fusion category F which is a categorification of K and Rep(B K