Yes. The Z commands are all done in units of microns. You can see this in the windows reference guide, (Fast Z Controls).
We generate an electronic signal (in volts) that translates microns to voltage.
The translation-factor is specified in the MDF (machine data file).
That voltage signal is used to tell a controller (another box of equipment) the target position.
That controller drives things in closed loop.
Thus, it will convert the voltage back to microns, and compare that with the measured position of the Z-actuator in order to compute a drive signal to give to the actuator.
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