A DCO is a hybrid design for an analog oscillator that – instead of using a voltage level to determine the pitch of the oscillator – uses a digital device such as a counter to determine the length of each waveform cycle and therefore the pitch. On the plus side, tuning is very stable, unlike some all-analog designs. On the minus side, there are no imperfections in pitch that cause subtle detuning (and therefore the perception of “fatness”) when using more than oscillator per voice. The DCO’s design also makes it harder to perform tricks with such as bending the pitch during a note, as you would have to keep changing the discrete number fed to the digital counter.
The DCO design worked well inside popular, mostly lower-cost instruments such as the Roland JX-3P and Korg Poly 800 that had a digital interface such as MIDI determining the pitch of what notes to play, but not so well in a voltage-controlled modular synth where you expect continuous control over pitch – you would have to convert the control voltage to a digital count, which would then create the analog waveform.