Pulse code modulation (PCM) is a digital modulation technique that involves sampling, quantizing, and encoding an analog signal. It has several key advantages over analog transmission including robustness to noise and easier regeneration. The process works by sampling the analog signal, assigning discrete levels or quanta, and encoding the quantized signal levels into a digital bitstream. Quantization introduces quantization noise, but the signal-to-noise ratio improves exponentially with more quantization bits. PCM finds widespread application in digital audio and telephony due to its ability to efficiently transmit multiple channels using time division multiplexing.