The input is given to the Reactance modulator. The discriminator reacts only to small changes in the carrier frequency but not to the frequency deviations in the carrier. Suppose frequency of the carrier increases, this higher frequency is fed to the mixer for which the other input is from the stable crystal oscillator. A somewhat higher frequency is will be fed to the discriminator. Since the discriminator is tuned to correct frequency difference which should exist between LC oscillator and the crystal oscillator, and its input frequency is now somewhat higher, the discriminator will develop a positive DC voltage .This voltage is applied to the reactance modulator whose transconductance is increased by the positive voltage developed by the discriminator . This increases the equivalent capacitance of the reactance modulator thereby decreasing the oscillator frequency is thus lowered and thus lowered and brought to the correct value.

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