The DC, according to Shimano, is "Digitally Controlled braking that allows anglers to externally adjust the brakes which measure and control the spool rotation with a microcomputer every 1/1000 of a second. Shimano’s DC system for digitally controlling the speed of the spool every nano-second of the cast gives even the most novice anglers a much more enjoyable experience with a baitcaster.". The spool has a winding in it that produces electricity that controls the braking. Not sure exactly how it works, but it makes a unique whine when you cast it.
