Delta modulation is an analog-to-digital conversion technique used to transfer data. It works by comparing an input signal to a reference signal and encoding the difference into a digital bitstream. A delta modulation system consists of a modulator that converts an analog signal to digital, and a demodulator that converts the digital signal back to analog. Delta modulation is simpler than pulse code modulation but can achieve high signal-to-noise ratios and variable bandwidth. However, it is limited by slope overload when signals change rapidly.