R1-R4 & R6 form a 4 bit digital to analog converter.
Various hi/lo on/off digital signals can be applied to R1...R4 which causes a vaying voltage to appear at that top of R6. This ac value is couple to thye output by C2.
Note the ratios of the resistors are approximately 1:2:4:8 - ie they are "binary weighted".
Using high and low drive only a4 bit analog value can be produced by applying the correct codes sequentially to R1...R4 and this allows a 16 level peak-to-peak sine wave to be produced. While this is very coarse by most standards and while the resistor ratios are quite innacurate, the resulting waveform is far superior to using just a square wave.
For extra points you can use high/open circuit/low on the input pins to produce additional levels. Fot true ternary on 4 pins you get 3^4 = 81 levels BUT some of these are liable to overlap in this case, especially with the very inaccurate resistor ratios. Odds are that they just use 4 bit binary.
Above I said "sine wave" but for eg DTMF you could work out the end result for adding two sinewaves and output the combined value. Greater accuracy would be desirable when multiple sinewaves are combined.
Paralleling resistors to get desired value.
An often quoted formula is used to calculate the resistance Rp of two resistors R1 & R2 in value
A simple rearrangement of this circuit produces an extremely useful but little quoted formula.
R2 = R1 x Rp / (R1-Rp)
ie If you have a resistor R1 and want a smaller resistance R2, then R2 is the value required to be placed in parallel.
eg here, the desired values are 1k, 2k, 4k, 8k.
The standard E12 values at or above the desired value are
1K, 2K2, 4k7 & 8k2
To get 2K you use Rparallel = R_now x R_wanted / (Rnow - Rwanted)
= 2.2 x 2 / (2.2-2k) = 4.4/0.2 = 22 = 22k
4k7 -> 4K: 4.7 x 4 / (4.7-4) = 18.8/0.7 = 26.857 -> 27k
8k2 -> 8K: = (8.2 x 8 )/.2 = 328k or
10k - > 8k : (10 x 8)/ (10-8) = 40k
If using E12 resistors you can choose another initial value or calculate to see how close a std resistor gets you - noting that the std resistor actual resistance will probably not be its nominal value.