It has piezo pickups embedded in the saddles on the bridge. Each piezo lead goes to 3 DSPs (so a total of 18 DSPs) where the signal is altered to suit the various guitar models the Variax has-Les Paul, Strat, Tele, Rickenbacker (6-and 12-strings), SG, ES335, ES175, Martin D18, Gibson acoustic, Coral electric sitar, 2 Dobros, banjo, Guild acoustic 12 string, Gretsch, etc. It performs a A/D and D/A conversion and sends it out through the 1/4" jack. You can also keep the signal digital and send it to a Vetta amp or Pod XT Live and save your patches with the appropriate guitar in it...eg. play Stairway to Heaven with the acoustic intro on one patch, switch to the Rickenbacker 12-string later, Les Paul for the solo and Tele for the distorted rhythm. Also they have a software which you can buy for $99 (or free for XT Live users) where you can build your own guitar with alternate tunings, new body styles, pickups etc. :rule: