Adaptive delta modulation is a delta modulation system where step size is automatically varied depending upon the input analog signal.

Output of the transmitter is string of continuous 1's or 0's, this indicates that overload has occurred that means DAC has lost the track of analog signal, with adaptive delta modulator, after a pre determined number 1s and 0s, step size is automatically increased.

After the next sample, if the DAC o/p amplitude is still below sample o/p, next step is increased further until DAC catches up with the analog signal.

When an alternative sequence of 1s and 0s is occurring this indicates that possibility of granular noise is high consequently DFC will revert to its minimum step size thus reducing possibility of granular noise.

Therefore, adaptive delta modulation overcomes problem of slope overload and granular noise, here it is superior to delta modulation.