In a personal computer, a disk controller is used to transfer a stream of bytes from the disk to a CPU. When the controller senses that new data is available $(\text{'}$new data ready'$),$ it signals the CPU $(\text{'}$indicate data available'$)$ that a new byte is ready to transfer. The data must then be read by the CPU $(\text{'}$data read by CPU'$)$ before the next byte is available. When the controller senses that the data has been read, it indicates that data is not available $(\text{'}$indicate data not available'$),$ in preparation for the next byte. If any byte is not read before the next one comes along, the disk controller asserts 'indicate data lost' until the disk controller receives a signal, 'reset'.

Here is the state diagram for this controller: