Digital signals are a subset of discrete signals, characterized by having finite values, often represented as binary (0 and 1). While digital signals can be continuous in time, such as PWM signals, they can also be discrete, existing only at specific time intervals. Discrete signals are defined at particular sampling rates, converting continuous analog signals into discrete forms. The sampling process creates a discrete analog signal, which is then transformed into binary digital values. Understanding these distinctions is crucial for applications in signal processing and communications.