First, let's define the terms 'display resolution' and 'counts'. A 3½ digit meter can resolve an input signal into 1,999 parts, while a 4 ½ digit meter can resolve an input signal into 19,999 parts. A change of 1 count is defined as the right-hand most digit going up or down by one (±1). For example, a display which is continuously alternating between "1899" , "1900" , and "1901" is said to be indicating "1900" ±1 count (or ±1 digit).
What is a "count," and how is it related to resolution?
A 3½ digit meter with a full-scale input range of ±2Vdc resolves a 1.999V input into 1999 counts, or 1999mV, with one count representing 1mV (0.001V resolution). If the first decimal point (DP1) is enabled, 1999mV can be displayed as "1.999". If the third decimal point is enabled (DP3), the same 1.999V input can also represent "199.9". The 0.001V resolution of the meter hasn't changed, but the decimal point has made the 1999mV look like "199.9".
The decimal points do not change the meter's basic resolution or sensitivity, they are simply place holders used to suit the user's engineering scaling requirement. The "199.9" reading in the preceding paragraph could represent 199.9 pounds (or, for the rest of the world, 199.9 Kilograms), 199.9 °C, etc.