Both analog-to-digital converters (ADCs) and digital-to-analog converters (DACs) can employ delta-sigma modulation. A delta-sigma ADC first encodes an analog signal using high-frequency delta-sigma modulation, and then applies a digital filter to form a higher-resolution but lower sample-frequency digital output. On the other hand, a delta-sigma DAC encodes a high-resolution digital input signal into a lower-resolution but higher sample-frequency signal that is mapped to voltages, and then smoothed with an analog filter. In both cases, the temporary use of a lower-resolution signal simplifies circuit design and improves efficiency.
The coarsely-quantized output of a delta-sigma modulator is occasionally used directly in signal processing or as a representation for signal storage. For example, the Super Audio CD (SACD) stores the output of a delta-sigma modulator directly on a disk.