Refers to numbers and signals that represent a number rather than a continuously variable signal. For example, a gear box is a digital device since a car can be in first, second, third or reverse but not in "first-and-a-half". Compare this with analogue, which refers to a signal whose value can vary continuously over time rather than taking a fixed values. For example, when someone speaks, the sound wave is an analogue signal, and it varies smoothly as the person speaks.
PCs will only work with numbers so cannot directly deal with analogue signals. To get around this, you need to fit an analogue-to-digital convertors (A/D convertors). For example, a sound card contains an analogue to digital converter to convert the sound signal from the microphone into numbers representing the volume. If a computer wants to create a sound, it must use a digital to analogue convertor (D/A convertor) to change numbers into variations in volume. (See also Binary, DAC.)