A properly designed digital counting system will increment or decrement halfway between the the displayed count so true round up/round down is used. A displayed value should be that value +/- a half least significant digit. Should the actual count exceed those limits, the display is incremented or decremented to the new value.
My DRO with 5 micron scales will display in increments of .0002" so if everything is correct, the value should be correct to +/- ,0001". There is a catch, however and that is the scale resolution is actually .005 mm which is ,000197" and the arithmetic that is done internally to convert to inches can sometimes create a bobble in the display.
