This lecture introduces discrete event simulation using a digital circuit simulator as an example. It covers the construction of digital circuits, base components like Inverter, AND Gate, and OR Gate, as well as more complex components like half-adders and full adders. The implementation involves wires, inverter functions, and gate functions with reaction times. The lecture also explains the Simulation trait, handling time, and event handling loop. It concludes with a sample simulation setup and a discussion on the trade-offs between functional and imperative programming in simulation.