Another category of signals is discrete-valued and continuous-valued or otherwise known as digital and analog signals. Digital signals are discrete-valued and analog signals are continuous electrical signals that vary in time as shown in Figure 1 (a) and (b). Analog devices and systems process signals whose voltages or other quantities vary in a continuous manner. They can take on any value across a continuous range of voltage, current, or other metric. The analog signals can have an infinite number of values. Analog systems can be called wave systems. They have a value that changes steadily over time and can have any one of an infinite set of values in a range. Analog signals represent some physical quantity and they can be a model of the real quantity. Most of the time, the variations corresponds to that of the non-electric (original) signal. For example, the telephone transmitter converts the sounds into an electrical voltage signal. The intensity of the voice causes electric current variations. Therefore, the two are analogous hence the name analog. At the receiving end, the signal is reproduced in the same proportion. Hence the electric current is a model and is an electrical representation of one's voice.

Not all analog signals vary as smoothly as the waveform shown in Fig 1(a). Digital signals are non-continuous, they change in individual steps. They consist of pulses or digits with discrete levels or values. The value of each pulse is constant, but there is an abrupt change from one digit to the next. Digital signals have two amplitude levels. The value of which are specified as one of two possibilities such as 1 or 0, HIGH or LOW , TRUE or FALSE and so on. In reality, the values are anywhere within specific ranges and we define values within a given range.