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A numerically-controlled oscillator (NCO) is a digital signal generator which creates a synchronous (i.e. clocked), discrete-time, discrete-valued representation of a waveform, usually sinusoidal. NCOs are often used in conjunction with a digital-to-analog converter (DAC) at the output to create a direct digital synthesizer (DDS).
Numerically-controlled oscillators offer several advantages over other types of oscillators in terms of agility, accuracy, stability and reliability. NCOs are used in many communications systems including digital up/down converters used in 3G wireless and software radio systems, digital phase-locked loops, radar systems, drivers for optical or acoustic transmissions, and multilevel FSK/PSK modulators/demodulators.