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The screen image information stored in the video memory (RAM) is of course digital, because computers operate on digital numbers. Every value is stored as sets of ones and zeros; in the case of video data, the patterns of ones and zeros control the color and intensity of every pixel (dot) on the screen.
The monitor, however, doesn't use digital information--it is analog. In order to display the image on the screen, the information in video memory must be converted to analog signals and sent to the monitor. The device that does this is called the RAMDAC, which stands for Random Access Memory Digital-Analog Converter. "RAM" of course is a well-known acronym that refers to memory.
Many times per second, the RAMDAC reads the contents of video memory, converts the information and sends it over the video cable to the monitor. The type and speed of the RAMDAC has a direct impact on the quality of the screen image, how often the screen can be refreshed per second, and the maximum resolution and number of colors that you can display. See here for more details.
Next: Video System Interfaces