- Digital precompensation (DPC) is considered a promising technique for high-throughput optical communication systems. The digital signal processing (DSP) at the transmitter relies on the availability of high-speed and high-resolution digital-to-analog devices to generate complex analog waveforms. However, one major challenge in current digital-to-analog converters (DACs) technology is the limited resolution, which introduces dominant quantization distortions when extensive DSP is implemented. In this paper, a dynamic quantization approach is suggested, termed as digital-resolution-enhancer (DRE), which mitigates the quantization distortion effects. This approach is based on the underlying assumption that quantization is a non-linear deterministic operation, implying that its impact on transmission can be anticipated and minimized. The proposed method is theoretically and experimentally investigated with special focus on linear precompensation for bandwidth limited systems. Simulation results demonstrate that the DRE improves the signal-to-quantization noise-ratio by up to 8 dB. Thus, the DPC can be applied with the reduced number of DAC's bits. Conversely, the DRE can enable the use of more complex DPC schemes using the same DACs hardware, and consequently, achieve extended reaches and higher transmission rates. Numerical simulations are verified by a set of extensive lab experiments. For electrical back-to-back (BTB) transmission, with an analog bandwidth of 13 GHz, 45 Gbaud QAM-64 is demonstrated using only 4 bits DACs. For optical BTB setup with an overall optoelectronic bandwidth of less than 5 GHz, 32 Gbaud QAM-4 is demonstrated using only 2.6 bits DACs.