In a nutshell, this is what DCC is:
Pulsed DC current to the motors, but AC current to the rails.
How do we get around all that, you ask? The current supplied to the rails is called "square wave", and comes in rapid pulses, but it has the characteristics of AC current...up and down past 'neutral'. Imprinted on that digitized AC current are instructions to the tiny microchip that must be inside every DCC locomotive. The microchip does the rest.
In DC you have to dial up the voltage to make the train go faster. With DCC, the voltage to the rails is constant, and it goes up or down as you set it for the scale locomotives.
How does the engine go faster, you ask, if the voltage is constant? That microchip meters out DC current to the motor, but still pulsed for really good slow speed response. So the current is rectified, in a way, by the chip. BTW, it is called a 'decoder'.
How do you stop all engines from doing the same thing like they would in DC?
No decoder will act on any throttle inputs you give to the system unless you call up the decoder. That means you must name each decoder so that it will know to whom you are speaking. We mostly assign the cab number of the locomotive to each engine's decoder, and when we dial in Loco 123, only that decoder will act on your commands. DCC stands for Digital Command Control. It is wonderful because on the same powered rails, you don't get all the engines wanting to chase each other. You can make two engines nose up to each other and touch couplers.
There is much more. Go to tonystrainexchange.com and read his DCC primer.
-Crandell