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A digitally controlled oscillator, or DCO, is an oscillator circuit that generates an analog signal, but whose frequency is controlled by a digital control input (as opposed to a voltage controlled oscillator, whose frequency is set by a control voltage). A DCO's frequency is controlled by a countdown timer, whose initial value is set according to the desired audio frequency. The timer is clocked by an ultrasonic master clock, typically running somewhere in the rage of 200 kHz - 4 MHZ. When it counts down to zero, it issues a timing pulse that drives the audio-frequency circuitry, and then it is reset to the initial value. The DCO first appeared in the mid-1970s, as designers started looking for an alternative to analog VCOs, which were rather difficult to design such that they would stay in tune, with the electronics parts that were available at the time. The ARP Pro Soloist was the first commercially available synth to employ a DCO.

DCO designs used in synths can be grouped into two major categories. One, used by Roland in a number of its 1980s synths, uses the countdown timer mechanism to replace the voltage comparator in an otherwise-conventional analog sawtooth core VCO. The pulse from the countdown timer triggered the reset transistor to discharge the VCO's integrating capacitor. A quirk of the design is that it still required an analog control voltage to drive the charging of the capacitor. The control voltage did not have to be precise, but it needed to be at least roughly proportional to the output frequency; otherwise, the DCO's output level would vary with frequency.

Th other design, used in the Pro Soloist, the Welson Syntex, and the Korg Poly-800, used the countdown timer to generate a set of square waves, by driving a train of clock dividers. In this design, 4-6 square waves are generated, each running at half the frequency of the previous one. According to the mathematical theory of Walsh functions, these are then mixed in specific proportions to produce an approximation of a sawtooth wave.

A DCO has the virtue that it stays in tune, unlike an all-analog VCO circuit. However, depending on the design, its waveform characteristcs are not precisely like an analog VCO. The DCO can behave differently when the frequency is being slurred, such as by a pitch wheel or portamento. And if it is not calibrated properly, its output level can vary with frequency. Contrarywise, some performers feel that the DCO, like the all-digital implemention, is too precise and does not possess the "thick" or "fat" sound of a VCO. After the end of the 1980s, for many years there were no synths in production that use DCOs, but Dave Smith Instruments brought back the DCO with the Evolver in 2002, and certain DSI / Sequential models continue to use DCOs.

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