Digital logic is the foundation of computers and examines basic logic functions like AND, OR, and NOT. Logic signals can take on two values, 0 and 1, and are associated with variables. The output of a logic gate depends on its inputs - an AND gate outputs 1 only if all inputs are 1, an OR gate outputs 1 if any input is 1, and a NOT gate inverts its single input. NAND gates are functionally equivalent to an AND gate followed by an inverter.