What is DCC?
This page describes my DCC setup. DCC stands for "Digital Command Control". It is a method by which model trains can be controlled. One unique feature is that more than one train can be independently controlled on a single piece of track. When I was still building my starter 4' x 8' layout in 1999, a fellow N-scaler highly recommended that I check out DCC rather than start by using the "old" block system. He ran DCC and I loved the idea of having the freedom to drive locomotives anywhere on the layout regardless of where other locomotives were. I thought about it and decided to go with the Digitrax Chief system. Now, some 10+ years later, I still have the same system, and, despite some glitches, am happy with it.
The Brain
Digital Command Control refers to the computer network developed to control locomotives and other electro-mechanical devices. Essentially communication is done through a computer network protocol, much like a home or office computer network works. There is a central processor, additional boosters (for heavy loads), one or more handheld controls (either wired or wireless), and decoders that receive the commands and do something useful with the commands.

- Digitrax DCS100 Command Booster -
A DCC system is a pricey investment. The Digitrax "Chief" system, when I bought it in 1999, came with the DCS100 Command Booster, a DT100 hand throttle, and one decoder. I also bought the Digitrax PS515 power supply (15 VAC, 5 Amps, 75VA) to power the Command Booster.
Since then I have bought many decoders (Digitrax N- and Z-scale decoders, and Soundtraxx' Tsunami), a couple of UP-3 fascia panels for plugging in the throttles, a PM4 for reversing track, and a UR91 for wireless control. I have also added a DT400 throttle, and had Digitrax convert both the original DT100 and the DT400 to a wireless throttle. The point is that you can expand the system as your needs grow and funds allow.
I prefer and am happy with the Digitrax products, but there are other companies who make DCC systems. Because they all use the same standard, you can intermingle parts from one company in with another.
Installation
The diagram below is my attempt at graphically displaying how all the main components fit together. The programming track is used to program the decoders that are installed in the locomotives. This track can be an electrically insulated part of the layout (a spur). I have a separate article on setting up for programming a decoder. As you can see, the power supply provides the power for the Command Station. The throttle sends commands to the Command Station, which, in turn, routes those commands, via the rails, to the decoders in the locomotives, or accessories decoders elsewhere on the layout.

- Simplified Wiring Diagram -
Control

- Digitrax DT400 Throttle -
The DT400 is the latest "top-of-the-line" throttle from Digitrax. It works well. I specifically got this one to make it easier to control turnouts and locomotives at the same time. The DT400 has increased display space and you can monitor and control both the moving locomotive and the stationary turnout. However, as is true-to-form with Digitrax, this thing is a beast to learn. I still have to think about how to turn the track power on with this thing. I don't know how many times I have moved the knobs on the throttle with no corresponding movement in the locomotives.
Automatic Polarity Switching (Reversing)

- PM4 Autoreverse/Short Circuit Protection -
The PM4 allows automatic control of a reversing section of track. This is a piece of track that turns around onto itself which would normally cause a short. Part of this track will be insulated from the rest of the layout. This insulated piece of track is powered/controlled by the PM4. When the locomotive crosses the insulated section, the PM4 automatically adjusts the polarity of the current to match that which the locomotive is expecting. It automates a process that would otherwise require a special switch on the layout's control panel. A switch that is easy to forget to set and hence be the cause of lots of shorts. I have found the manual that comes with the board to be very easy to follow. It does involve a lot of soldering and paying attention as to which pins connects to what. The PM4 works well.
The "4" in the PM4 stands for the fact that this board has 4 separate circuits. Any of these circuits can be used for either an auto-reverse unit or a short-circuit protection unit. By default, if you wire the entire layout as one big block to your DCC Command Station, when a short occurs, it shuts down the whole system. If you convert your layout into sections of isolated track, you can have each of them be protected by one of the circuits of the PM4. Then, when a short occurs, only that section of the layout will be shut down, while the rest of the layout can continue to operate.