What is a squawk code?

Or better how it generated? I can't come up with a better way of asking the question. I know it's octal, but is there a type of modulation that is used to generate the code? Like PCM or what? I asked this question in my sim forum and got no answer and so much as told me to read Wikipedia. Well, I have, but it doesn't say what modulates (for lack of a better word) the squawk code.



I'm eager to learn please be respectful. Thanks in advance!