The best way to explain is by using the illustration below.  In the illustration below, JOHN CALLS LINDA.  Since Linda has Caller ID service active on her phone number, she can see her caller id display on her phone that John Smith is calling her from phone number 778-777-1234.  Thanks to Caller ID service, Linda can decide if she wants to talk to John before she answers the call.




JOHN




LINDA’S HOME PHONE SHOWS
JOHN’S NAME & NUMBER