Movement on the lathe is controlled by mechanical items, ie the feed screws and respective nuts. Usually these items are square type threading, ACME. The dials on the crossfeed and compound have numbers on them, typically in 0.001" marks.
The DRO is a set of instrumentation that tracks actual movements on the lathe and presents it to the operator on a hexidecimal display system. So one sees actual movements of the crossfeed and the horizontal feeds of the lathe on the display system, whatever type of display technology you bought.
The nuts and acme shafts get worn over time, and develop backlash, ie slop. One can get around such by going past the position you desire with the control dials, and then coming back to put a touch in the mechanisms, ie no slack in that direction. Of course, one has to keep track of how cutting pressure is applied to these things to keep the nut/acme interface in contact. Especially true if one is using a mill adapter on the lathe.
DRO's, direct read outs, digital read outs, are fairly expensive but some really like them. Way too expensive for me and my old machine. With a DRO you watch the display for critical movements rather than watching a dial indicator or manually controlling the control dials.
You might just google or bing........ "lathe DRO" to see some pictures and links to peruse if you so desire.
