Dom says:

OK, first there are a number of good books on this – search Amazon.
The basic concept is really easy to understand though. The tracks are live all the time which provides power for operating everything from carriage lighting to sound effects etc.
How it works is the same principle as normal DC train sets.
On a DC layout you have a power supply – the mains voltage which enters your controller. From here you adjust the output voltage which is applied to the rails to power the train motor.
With DCC what you are doing is effectively moving your controller to be inside each train – the “chip” which you fit. This chip is constantly powered by the incoming supply (transformed to 12volts) but the amount of power it puts to the train motor is controlled by digital signals which are superimposed on the 12volt supply. It is in effect a controller in itself.
The 12volt supply is common to all parts of the layout (which massively simplifies wiring it up) and the voltage remains constant at all times. It is the digital signals which your handset puts out that control how the DCC chips inside the loco’s vary the power to the motors. These DCC signals are specific to each DCC chip which is how you can target one specific loco on a layout with many locos on the rails. All you are doing is targeting the locos one at a time. Think of it like a computer network where each computer has its own IP address. The network is connected all the time but the computer will only respond to requests which are sent to it specifically. It’s the same with DCC. All connected on one set of wires but each device has its own specific address.
In terms of wiring, this is really a whole lot simpler than regular DC wiring. My layout has only 3 pairs of wires from the PSU to the tracks. Even reverse polarity is easier since most controllers will sort it out for you. My Lenz set does this without any intervention from me.
Hope this helps a bit.