In S.E. Hinton's book, The Outsiders, readers encounter frequent examples of slang terms appropriate to the novel's setting. Hinton wrote her masterpiece in the sixties and also set it in that decade; it was a time in American culture when the youth were eager to express themselves and seek freedom in every way, including creating their own lingo, which was often drastically different from that of older generations. Hinton wrote the book using relaxed, informal dialogue, which was certainly appropriate to the tone and characters of the novel.
In the first chapter of The Outsiders, the protagonist, Ponyboy Curtis, is jumped by a group of "Socs." Darry, his oldest brother and guardian, is upset and scared by the attack, but fails to react in ways that Ponyboy understands. Sodapop, the middle child of the Curtis family, attempts to explain Darry's reaction to Ponyboy.
...Soda threw one arm across my neck. He mumbled something drowsily. "Listen, kiddo, when Darry hollers at you...he don't mean nothin'. He's just got more worries than somebody his age ought to. Don't take him serious...you dig, Pony? Don't let him bug you. He's really proud of you 'cause you're so brainy. It's just because you're the baby--I mean, he loves you a lot. Savvy?"
When Soda says, "...you dig, Pony?," he is asking if Ponyboy understands. Basically, "you dig" means the same thing as, "Got it?" or "Do you know what I mean?"
As we all know, slang changes over time. The Outsiders was set in the early 1960's. "You dig" referred to "Do you understand?". Another meaning as in "I dig that music" means I like or I appreciate. Each group of teens used their own slang, while some slang was universal. The reason for slang remains today, to send a message to a peer without letting the adults ("the establishment, the parental unit, the rents") know what the actual conversation meant. Today's text messages have basically the same purpose.