Summary: Discrete-time systems can operate on both analog and discrete-time signals. Computers are discrete-time systems because they perform operations according to a clock.
Discrete-time systems can act on discrete-time signals in ways similar to those found in analog signals and systems. Because of the role of software in discrete-time systems, many more different systems can be envisioned and constructed with programs than can be with analog signals. In fact, a special class of analog signals can be converted into discrete-time signals, processed with software, and converted back into an analog signal, all without the incursion of error. For such signals, systems can be easily produced in software, with equivalent analog realizations difficult, if not impossible, to design. Digital systems are more general than analog systems because they can also deal with symbolic signals.
How do computers perform signal processing? We will discover that digital signals have their own Fourier transform definition and that digital filters can also be designed. We will also discover that digital systems enjoy an algorithmic advantage that contributes to rapid processing speeds: Computations can be restructured in non-obvious ways to speed the processing.
Before we explore these ideas, we need to understand what a computer is and how it computes.