It is a device capturing and controling all the signals, which are being created by the whole system, especially the made and received phone call signals. The device is mostly used for connecting regular phone system with the Internet and backwards.
In the past, when you call an office building or business, you would either be transferred to the department you want to talk to, or given their extension number. This extension is usually a 2-3 digit code that when dialed, transfers you automatically to the particular person or department you want to speak with. The reason why this code works is because it is programmed into a PBX system.