DTE is the source or destination of digital data, while DCE is the equipment used to transmit or receive the data. DTE stands for Data Terminal Equipment, while DCE stands for Data Communications Equipment.
Examples of devices that are DTEs include computers, printers and routers. They are all devices that act as the source or destination for data, but they are not concerned with the communication of data between devices. The most common usage of the word is in relation to RS-232C standard serial communications.
DCE, on the other hand, is concerned with the communications aspect of data. This means it communicates with a DTE. So a DCE takes data from a DTE, converts it into a signal that can be transmitted, and transmits it, usually to another DTE.
One of the most common examples of a DCE device is a modem. It communicates data from the internet to a DTE, which could be a computer, a tablet or a smartphone. Other DCE examples include ISDN adaptors, satellites and network interface cards. Also, as well as being responsible for the communication, DCE devices are often responsible for the timing over a serial link too.
The classification was introduced by IBM, but it is now widely used in a range of devices and applications.