This schematic diagram illustrates light absorption through living tissue. Note that the AC signal is due to the pulsatile component of arterial blood, while the DC signal is comprised of all the nonpulsatile absorbers in the tissue: nonpulsatile arterial blood, venous and capillary blood, and all other tissues.
Redrawn from Ohmeda Pulse Oximeter Model 3700 Service Manual, 1986, p. 22.