Signalling and Call set-up

There are three types of Signalling:

1) Supervisory: On-hook, off-hook, Ringing
2) Address: Communicates the digits that were dialed like DTMF (Dual tome multi frequency) and Pulse dialing
3)Informational: Dial-tone, ring-back tone, recorder tone.

Call set-up:

1.The calling phone goes off-hook, closing the circuit to the local CO switch.
2. The local CO switch detects that current is flowing over the closed circuit and sends a dial tone to the calling phone.
3. Address signals (DTMF or pulse) are sent as the calling party dials the called number.
4. The local CO switch collects the digits and makes its routing decision; in this example, it uses an SS7 lookup tolocate the destination CO switch.
5. Supervisory signaling indicates to the far-end trunk that a call is inbound.
6. The PBX determines which internal line the call should go to and causes the connected phone to ring.
7. The ringback tone is heard at the calling party end.
8. The called party goes off-hook, and a voice circuit is established end-to-end.The fact that all this happens with very high reliability billions of times every day is pretty impressive. It also providessome insight into how complex it is to duplicate these functions in a VoIP system. More on that later

Reference: CCNA Voice Quick Reference