Well there's nothing like preparing a nice thesis on how something works- and have someone beat me to it!
But just in case you are still interested in my short layman's explanation-
DSL works by putting a high-frequency signal on the phone line and modulating it digitally. The problem is that conventional phone lines were designed to carry only voice frequencies (below 4-Khz) so this signal attenuates rapidly as it goes through the wire which is why you have to be close to the phone office exchange where the DSL equipt is or it becomes too weak to use.
Is like having a leaky garden hose- by the time you get to the end much of the water(signal) has been lost.