Multimeter Manual Precision Explained
The 5 digits is 5 least-significant digits in the display on that specific range. That corresponds to a percentage of full scale, which is the more modern way to indicate accuracy. 

The 0.2% should be (but is not always) a percentage of reading. 

The total inaccuracy is the sum of the two. 

In other words, if the basic DC accuracy of a 4-1/2 digit meter on the 2 volt range is stated as 0.2% + 5 digits, and you are reading a 0.5V signal, the error specification is 0.002 * 500mV + 0.5mV or 1.5mV (+/-0.3% of reading). 

A reading of 500.0mV would represent an input voltage somewhere between 498.5mV and 501.5mV.  

Edit: Maybe if I show this in a table it will be a bit more clear

Let's assume the range is +/-1.9999 Volts (4.5 digit meter) and the specification is +/-0.2% + 5 digits. 



Naturally, you'd normally switch to a lower range (if one is available) once you won't go over the lower range. So if there's a +/-199.99mV range available you'd switch for the 100mV example, but for a 200.1mV input you'd be stuck with +/-0.45% error.