HDLC is a bit-oriented protocol that defines rules for transmitting data between network nodes. It supports full-duplex communication and organizes data into frames sent from a source to a destination. HDLC defines three station types - primary stations control data flow, secondary stations operate under primary control, and combined stations act as both. HDLC uses different frame types and operates in modes like normal response for point-to-point links and asynchronous balanced for communication between combined stations.