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Let's talk about AM and FM first. AM stands for "amplitude modulation"; this is a technique used in electronics communications. It is used most commonly for transmitting information via a radio wave. The amplitude is the distance a wave travels away from it's rest position; a device called an amplifier, also called a modulator, varies the strength of the wave to do this. Think about an "amplifier" for an electric guitar; it makes the sound the guitar makes louder by increasing it's amplitude. This contrasts with FM, or "frequency modulation", as FM varies the frequency, or number of waves passing within a given time frame. Again, a device called a modulator would assist in either increasing the frequency or decreasing it.
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