Emacs buffers use an 8-bit character set, because bytes have 8 bits. ASCII graphic characters in Emacs buffers are displayed with their graphics. The newline character (which has the same character code as LFD) is displayed by starting a new line. The tab character is displayed by moving to the next tab stop column (normally every 8 columns). Other control characters are displayed as a caret (`^') followed by the non-control version of the character; thus, C-a is displayed as `^A'. Non-ASCII characters 128 and up are displayed with octal escape sequences; thus, character code 243 (octal) is displayed as `\243'.
You can customize the display of these character codes (or ASCII characters) by creating a display table. See Display Tables. This is useful for editing files that use 8-bit European character sets. See European Display.