An ESC, like the Victor, uses a circuit called an H-bridge to control the speed and direction of the motor. It uses transistors to control the polarity of the power supply seen by the motor terminals. Heres a sample schematic:
Code:
--T2--o--T1--
| | |
+ ---o M o--- -
| | |
--T1--o--T2--
In the diagram, T1 and T2 are transistors that are either open or closed. If T1 are closed and T2 are open then the motor will turn one direction. If T1 are open and T2 are closed then the polarity at the motor leads will be reversed and the motor will turn the opposite direction. If they're all open then the motor will turn freely (coast). If they're all closed then the motor will not turn at all (brake). By controlling the state of the transistors you can control the direction of the motor.
Now, if instead of closing the circuit you switch it on and off very quickly then you can also control the speed. The Victor measures the width of the incoming PWM pulse to determine the speed and direction it needs to drive T1 and T2. The actual frequency of the PWM signal applied to T1 and T2 is much higher than the PWM output from the RC. You could replace T1 and T2 with a push-button switch or a relay and get the same end result. Transistors work better because they can turn on and off much faster.