Unlike analogue, digital technology uses binary code, which represents the audio signal as a series of 1s and 0s. These digits are part of an encrypted code that gets put back together at the device, such as your telephone or TV, at the other end.
Despite being more expensive, digital technology is often preferred to analogue because of the quality of the transmission. If you think back to analogue television, radio or phone calls, you probably suffered from blurred images and distorted audio at one point or another.
Due to the way digital technology reassembles the binary code, any errors are fixed before you hear or see them at the other end. Another advantage is that it can carry a lot more data than an analogue signal.