The idea of a sigma-delta modulator is to allow high resolution analog to digital conversion using simple circuit components by oversampling.
A first order modulator consists of three parts:
1. Integrator
2. 1-bit Comparator
3. 1-bit Feedback DAC
The integrator samples the input at a frequency much higher than the required niquist frequency and integrates the incoming signal, settling on a slow changing DC level.
The 1-bit comparator then compairs this signal to a reference voltage. If the input is lower, a logic zero is outputed. If the input is higher, a logic one is outputed.
The feedback DAC takes the output and converts it back to an analog signal so it can be fed back to the integrator, in order to fix errors.
The digital output is a train of bits.
When the input is close to VDD, we get a high consentaration of logic ones at the output and when the input is GND we get a high consentration of logic zeros.
When the input is VDD/2, we get an equal mix of ones and zeros.
Hope this helps.