Direct sequence spread spectrum uses a spreading code to spread the original signal's energy over a wider frequency band. It involves spreading the narrowband input signal using a mathematical transform, transmitting it on a carrier, and recovering the original signal using a correlator that reverses the spreading process. The technique spreads the signal using a chipping sequence or pseudorandom noise code, applied to the original data stream. It provides advantages like reducing frequency selective fading and allowing multiple base stations to operate on the same frequency range.