The external mode directly multiplies the signal from input 1 and input 2. This feature is useful when the modulation signal is not a sinusoidal waveform. For example, if the modulation signal is a low duty cycle pulse, the direct multiplication significantly improves the demodulation spectral coverage, compared to sinusoidal demodulations.
The external (PLL) establishes a phase-locked loop with input 2 and generates a pair of sinusoidal waves at the same frequency for dual-phase demodulation. This allows the user to access the X, Y, R, and theta directly from the lock-in amplifier. The user can also fine-tune the phase of the local oscillator with this mode. This is the recommended external reference mode for most use cases.
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