From Federal Standard 1037C -- Glossary of Telecommunication Terms
DCE = Data Circuit-terminating Equipment.
1. In a data station, the equipment that performs functions, such as signal conversion and coding, at the network end of the line between the data terminal equipment (DTE) and the line, and that may be a separate or an integral part of the DTE or of intermediate equipment.
2. The interfacing equipment that may be required to couple the data terminal equipment (DTE) into a trasnmission circuit or channel and from a transmission circuit or channel into the DTE.
synonyms Data Communications Equipment (deprecated) and data set (deprecated).
DTE = Data Terminal Equipment
1. An end instrument that converts user information into signals for transmission or reconverts the received signals into user information.
2. The functional unit of a data station that serves as a data source or a data sink and provides for the data communication control function to be performed in accordance with link protocol.
Given that the above sounds like gobbledegook, a brief history lesson:
Back in the dark ages of networking (before the Codaphone decision opened up the telephone network in the US, and the case for decades afterward in many other countries), to get from point A to point B, you had to go to the phone company to get a data line. To "protect" their cable plant, the phone company provided the DCE (aka modem or CSU/DSU) to take your data and make it palatable for their infrastructure.
Networking standards were defined in terms of the DTE/DCE interface, the definition of how your equipment talked to the equipment provided by the phone company (a government agency in most countries outside the US). Example DTE/DCE interface definitions include RS232, X.21, X.25, RS530, etc. Note that some of these interface protocols are for higher levels of the OSI model, such as X.25 and LAPB. At the physical layer, they define the physical interface (the connecter to use), the electrical interface (what value is a 0 and what is a 1), the functional interface (which pin is receive and which is send), and the procedural interface (hardware handshakes, who provides clock, and the like).
Be very careful of what you read, because many authors and manual writers never take the time to keep the details straight (be particularly wary of marketing literature, whose authors prefer to define old terms in new ways to make their product sexier). The classic examples are redefinition of the term "baud" to mean "bits/second" and "internal clocking" to mean coming from the device (rather than from the DCE, internal / external refering to the network infrastructure).
Bottom line: Use extreme care when reading, because many networking terms have been corrupted over the years, and their meaning in context may or may not relate to the formal definition. My favorite example was the marketing campaign about 10 years ago for "revolutionary new protocol independent routers" which, if you read between the line, were nothing more than multiport bridges! If in doubt, use the duck test: If it waddles like a duck, swims like a duck, flies like a duck and quacks like a duck, don't worry what the brochure calls it, it's a duck.
Good luck and have fun! And don't let anyone intimidate you... Networking is conceptually easy and common sense. It's just that the basic concepts tend to get obscured by jargon (particularly when used incorrectly), lost in the morass of details, or lost in history.
Vincent C Jones
www.networkingunlimited.com
