Digital zoom is the cropping and then interpolation of a photo by the camera's processors.
Basically what the camera does is that it's just cutting out the edges of your photo [cropping], and then rendering out pixels to make the cropped photo as large [in resolutions] as the camera's set resolution. It's good ONLY if you're the kind of person who don't care about 'pristine' picture quality, and are too lazy to crop your photos. It's bad if you plan to print your photos for publication, competition, or showcasing purposes. Basically: if you care about your photos, forget about digital zoom. If you're just a typical PnS user who's not tech-savvy, you wouldn't be reading this, and still continue to use Digital zoom. So don't use it.
As far as I know, DSLRs don't have digital zoom [only zoomed preview]. If you want to have the same function as digital zoom, one way is to use your computer. Softwares like Photoshop Starters Edition, Photoshop, Aperture, etc. can crop your photos. If you want to interpolate them [still not encouraged, because it's like uncompressing a compressed file. redundant.], some softwares can do that too.
Oh, normally we don't think of zoom in a DSLR as a feature of the CAMERA BODY. we think of zoom as a characteristic of the lens. Why characteristic? Because there's lenses like my 50mm f/1.4, which is called a "Prime lens", which doesn't have any zoom. What's the use, you ask? Well, in the case of the 50mm, it has a really large aperture [f/1.4], which makes this lens very suitable for photos with lots of bokeh [another issue, not elaborating here].
So please don't think of zoom as the all-in-all de-facto standard of defining a good camera from a worse one.
Cheers!