The device that converts analog signals to digital signals is called an 'analog-to-digital converter' (ADC), and the device that converts digital signals to analog signals is called a 'digital-to-analog converter' (DAC).

An ADC works by measuring the amplitude of an analog signal at regular intervals and assigning a corresponding digital value to each sample. The resolution of an ADC determines the number of discrete levels that can be used to represent the analog signal, and this is typically expressed in bits. For example, an 8-bit ADC can represent the amplitude of the analog signal using 256 different levels.

A DAC works in the opposite direction by taking a sequence of digital values and converting them into a continuous analog waveform. This is done by outputting a voltage or current that corresponds to the digital value at each sample point, and then smoothing out the resulting waveform using a low-pass filter. The resolution of a DAC determines the accuracy with which the analog waveform can be reconstructed, and this is also typically expressed in bits.