Digital circuits.:
All digital circuits work on logic. that is logic of zero and one. Every thing in digital electronics is summarized in 1 and 0. Here 1 represents +5 voltage and and 0 represents 0 voltage or ground level.
DC voltages/ current :
are ideally steady. i.e there is no fluctuation in it. Like battery. it gives 1.5 V if it is rated for 1.5V.
AC current :
where as ac current i.e. Alternating Current as name suggests varies with time. Means for every given moment the voltage is changing and so is current. It is like if as time increases voltage and current increases and after reaching certain top level it goes down again to level 0 and then it further goes down in -ve to certain lowest level and then again it goes up to 0 level and this goes on.
It has sinusoidal wave form. we have in india 60 hz (hertz) current that means voltage changes from 0 -230-0- -230 -0 sixty times in a second.
Now how can a digital circuit work for it's requirement of constant ± 5 V status if the current is varying every moment ? So dc is the only source for digital circuits. AC voltages are converted to dc voltage by using rectifier circuits comprising of diode, capacitor so some voltage stabiliser ICs etc.. as per need.
Now how the electricity is produced ? DC or direct current is available in lightning happening in sky or the by converting from AC to DC or by using battery[ NICD, Lead Acid ect ]. And ac is produced by the rotation of copper coils in the magnetic field.i.e. nutshell. You may have heard of wind electricity / coal electricity / water electricity etc.... ultimately all they do is to rotate the copper coils in the magnetic field to produce electricity. And this method is far cheaper than producing DC current. So it is widely used in producing electricity world wide.