Differential Pulse Code Modulation (DPCM) is a signal encoding technique used in digital communication. It works by encoding the difference between successive samples of an audio or video signal rather than encoding each sample independently. This method reduces the amount of data needed for transmission, making it more efficient. In DPCM, the current sample is predicted based on previous samples, and only the difference (or error) is transmitted. This approach helps to minimize redundancy in the data stream, leading to lower bandwidth usage and improved transmission speeds, especially in applications like audio compression and video streaming.