This is a frequent question among the model railway community. This document is aimed to help you understand the differences without the need to study lots of books or articles.
To understand this question, let's first take a look at what the difference is between ANALOGUE and DIGITAL operation
DC ANALOGUE SYSTEMS
DC Analogue is a control system standard to most starter sets which allows the user to control the track (and not the locomotive). This means that two or more trains on the same track will move, speed up, slow down and stop at the same time. DCC DIGITAL SYSTEMS
DCC Digital stands for ‘Digital Command Control’. DCC Digital systems allow individual locomotives and accessories to be independently controlled by the controller. Other functions, such as lighting and sound, can also be independently controlled.
DCC READY
This logo indicates that the locomotive, train set or train pack is fitted with a socket that is ready to accept a DCC decoder. The logo is prominent on the item's packaging and is usually next to the picture of the locomotive or the item's barcode. It will usually be accompanied by a number, such as 6, 8, 18, 21, etc., which indicates the type of decoder this locomotive accepts (more on this below).
The locomotive requires a DCC decoder to be fitted to the socket in order for it to work on a DCC controlled layout. It can however still be used on the conventional DC (analogue) layout.
DCC FITTED
This logo indicates that the locomotive, train set or train pack is fitted with a socket that has a pre-installed factory decoder fitted to it.
This means that the locomotive is ready to run and operate on a DCC controlled layout and can now be called up by request from a Digital Controller. Additional features, such as lighting and sound, can also be independently controlled (only if the locomotive is fitted with these accessories).
Many DCC Fitted locomotives can also be run on DC layouts (see note below). Some accessories may continue to work automatically, such as lighting and sound, however, the user will not have independent control of these under DC operation. It is important to note that manufacturer's decoders who support sound playback on DC operation will only provide a selection of sounds when the locomotive is detected to be moving or stopping (such as chuffing, coasting and braking sounds).
*Some manufacturers may issue a warning that they do not recommend a DCC fitted locomotive to be operated on a DC (analogue) layout, and may void any warranties. Check your locomotive's manual for more information. Not all sound decoder chips enable sound playback on DC operation, and this information is provided in your decoder manual.
DC ANALOGUE (no logo)
Where a logo does not appear, this indicates that the locomotive, train set or train pack is not fitted with a socket to accept a DCC decoder. Some locomotives can be converted to DCC by wiring the decoder directly. This requires soldering the wires of the decoder directly to the locomotive's motor, power pickups and lighting/sound accessories.
PIN NUMBER
For DCC Ready locomotives, train sets or train packs, often a number icon will appear next to the DCC Ready Logo. This indicates the type of decoder that will fit into this DCC socket. In this example, a 21-pin type decoder is required. If the number is 8, this would indicate an 8-pin type decoder is required.