Truly "digital" joysticks, in the DOS realm, can be thought of as Atari joysticks--simple 4-directional joysticks with a single fire button--that can be connected to the computer. The appeal of such setups was the elimination of joystick calibration; with digital joysticks, you're either pushing the stick, or you're not.

Some companies, like Banana Software Development, supported this setup, although you had to build a simple device to attach the Atari-style joystick to the parallel port of the PC. Some other computers supported "digital" joysticks natively, like the Amstrad PC.

Digital Joystick is part of the Controller Types Supported category. List of more specific ways how some generic controller (i.e. joystick, gamepad, mouse) operates (i.e. analog, digital) or how it connects to the device (i.e. wired, wireless).