You can't simply transmit bits directly across telephone lines. It must first be converted into analog sound waves.
We typically use a modem to convert ditgital information to analog signals. The word "modem" stands for "modulator-demodulator".
A modem's purpose is to convert digital information to analog signals (modulation), and to convert analog signals back into useful digital information (demodulation). If you've ever picked up your telephone while you were using your modem, you've no doubt heard a constant loud, screeching noise. This noise is the sound of digital information after it's been converted to analog sound waves.
Modems constantly transmit a carrier signal. The carrier signal's function is, basically, to "carry" information from one place to another.
Modem transmit information by varying, or modulating, this carrier signal.