| Differential GPS is a method and service that is used to compensate for errors in the PRN signals sent by GPS satellites. These errors may be natural, such as those due to atmospheric distortion or interference, or may be deliberate, such as those errors introduced into the civilian-readable P-code by the DOD until May 2000.
How does it work?
In order to utilize DGPS, you must first find a spot near to where you will be navigating, and survey its location precisely. Your corrected GPS will be no more precise than the measurement of this location. Then, place a GPS receiver on that spot, along with a few specialized chunks of electronics. Have the system do the following:
- Take constant GPS readings of the (possibly wrong) current PRN signals.
- Calculate the location defined by these readings.
- Compare that location to its own known, surveyed location.
- Take the correction between the two and broadcast it on a handy radio band.
Now, if you modify a regular GPS receiver to pick up and insert these corrections, you've managed to compensate for billions of dollars of secrecy, intentional inefficiency, and more!
Why do this?
Because GPS isn't precise enough to do some tasks that people want it to perform. Landing airplanes is one such; error of a few inches can be severely problematic. This method allows for the correction of such error within the area defined by the footprint of the particular satellite the DGPS system is operating in. | 
