Pulse-code modulation (PCM) is a method used to digitally represent sampled analog signals. It is the standard form of digital audio in computers, compact discs, digital telephony and other digital audio applications. In a PCM stream, the amplitude of the analog signal is sampled at uniform intervals, and each sample is quantized to the nearest value within a range of digital steps. Linear pulse-code modulation (LPCM) is a specific type of PCM in which the quantization levels are linearly uniform. This is in contrast to PCM encodings in which quantization levels vary as a function of amplitude (as with the A-law algorithm or the μ-law algorithm). Though PCM is a more general term, it is often used to describe data encoded as LPCM. A PCM stream has two basic properties that determine the stream's fidelity to the original analog signal: the sampling rate, which is the number of times per second that samples are taken; and the bit depth, which determines the number of possible digital values that can be used to represent each sample. Early electrical communications started to sample signals in order to multiplex samples from multiple telegraphy sources and to convey them over a single telegraph cable. The American inventor Moses G. Farmer conceived telegraph time-division multiplexing (TDM) as early as 1853. Electrical engineer W. M. Miner, in 1903, used an electro-mechanical commutator for time-division multiplexing multiple telegraph signals; he also applied this technology to telephony. He obtained intelligible speech from channels sampled at a rate above 3500–4300 Hz; lower rates proved unsatisfactory. In 1920, the Bartlane cable picture transmission system used telegraph signaling of characters punched in paper tape to send samples of images to 5 levels. In 1926, Paul M. Rainey of Western Electric patented a facsimile machine which transmitted its signal using 5-bit PCM, encoded by an opto-mechanical analog-to-digital converter. The machine did not go into production.

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Differential pulse-code modulation
Differential pulse-code modulation (DPCM) is a signal encoder that uses the baseline of pulse-code modulation (PCM) but adds some functionalities based on the prediction of the samples of the signal. The input can be an analog signal or a digital signal. If the input is a continuous-time analog signal, it needs to be sampled first so that a discrete-time signal is the input to the DPCM encoder. Option 1: take the values of two consecutive samples; if they are analog samples, quantize them; calculate the difference between the first one and the next; the output is the difference.
Dither
Dither is an intentionally applied form of used to randomize quantization error, preventing large-scale patterns such as color banding in images. Dither is routinely used in processing of both digital audio and video data, and is often one of the last stages of mastering audio to a CD. A common use of dither is converting a grayscale image to , such that the density of black dots in the new image approximates the average gray level in the original. ...[O]ne of the earliest [applications] of dither came in World War II.
Telephone exchange
A telephone exchange, telephone switch, or central office is a telecommunications system used in the public switched telephone network (PSTN) or in large enterprises. It interconnects telephone subscriber lines or virtual circuits of digital systems to establish telephone calls between subscribers. In historical perspective, telecommunication terms have been used with different semantics over time. The term telephone exchange is often used synonymously with central office, a Bell System term.
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