The number of possible pulse amplitudes in analog PAM is theoretically infinite. Digital PAM reduces the number of pulse amplitudes to some power of two. For example, in 4-level PAM there are possible discrete pulse amplitudes; in 8-level PAM there are possible discrete pulse amplitudes; and in 16-level PAM there are possible discrete pulse amplitudes.
the numbER Of PosSIblE PuLsE aMPlitudES in aNaloG pam is thEOreTicalLy infinIte. digItal Pam rEducEs the NUMbeR oF PulSe aMpliTudeS tO some PoWEr Of twO. FoR exaMPlE, In 4-lEveL pAm therE arE pOssiBle dIsCRete pUlse amplItudes; iN 8-lEvel pam there aRe POSsIbLe diScrEte pulse AmplitudEs; and In 16-leVEl pAm therE aRE poSsibLe dIscretE pUlsE AmPlItudEs.