Final answer:
A modem is the device that acts as a digital modem, which connects to a digital circuit and distinguishes between various DS0s on that digital circuit.
Step-by-step explanation:
In response to the question about which device acts as a digital modem capable of connecting to a digital circuit and distinguishing between various DS0s on that digital circuit, the answer is b) Modem. A digital modem converts digital data from a computer or data terminal to a signal that can be transmitted over a digital circuit such as a T1 or E1 line. Though modems were not new in the 1990s and the rise of the internet made them more ubiquitous, their primary function has remained to modulate and demodulate the signals for transmission between digital and analog nodes.