Source : Free On-Line Dictionary of Computing

Data Communication Equipment
     
         (DCE) The devices and connections
        of a communications network that connect the communication
        circuit between the data source and destination (the {Data
        Terminal Equipment} or DTE).  A {modem} is the most common
        kind of DCE.
     
        Before data can be transmited over a modem, the DTR (Data
        Terminal Ready) signal must be active.  DTR tells the DCE that
        the DTE is ready to transmit and receive data.
     
        DCE and DTE are usually connected by an {EIA-232} {serial
        line}.  It is necessary to distinguish these two types of
        device because their connectors must be wired differently if a
        "straight-through" cable (pin 1 to pin 1, pin 2 to pin 2 etc.)
        is to be used.  DCE should have a female connector and should
        transmit on pin two and receive on pin three.  It is a curious
        fact that many {modem}s are "DTE" according to the original
        standard.
     
        (1995-02-28)