A modulus-n counter is a sequential logic device that counts through a predetermined sequence of states when triggered by a clock signal. The number of states it cycles through before returning to the initial state is called its modulus. For example, a 2-bit counter with states 00, 01, 10, 11 has a modulus of 4. The maximum modulus of an n-bit counter is 2^n. Modulus counters are used in applications like frequency counters, digital clocks, time measurement, and more.