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This lecture covers the transformation of natural numbers into place-value notation with base B, focusing on the addition and subtraction operations. Starting with the division process, the instructor explains how to add two place-valued numbers by summing the digits at each position and handling carries. The limitations of digital systems in handling addition are also discussed, with a specific example illustrating an overflow situation. Similarly, the subtraction of place-valued numbers is demonstrated, emphasizing the borrowing process and the absence of negative numbers in this system.