In order to detect the status of tracks the LB101 functions as a current sensor, and is inserted between the LR101 and the monitored track section. The LB101 can monitor two track sections independently from each other.

The LB101 contains two independent occupancy detectors, each of which can be used to detect that a train or piece of rolling stock occupies a section of track. It operates on the so called “current sensing principle”. The LB101 only detects occupancy when there is a "current consumer" within the monitored track section (detection section). The LB101 has been designed to detect a decoder equipped locomotive or a single car with lighting or resistor wheelsets.

When the LB101 detects that there is something it its detection zone, the LB101 closes an electronic switch. This switch can be used to trigger layout feedback devices such as the DIGITAL plus LR101 encoder, or other low current electronic inputs such as those used to trigger some signal systems. The LB101 is compatible with all NMRA DCC systems.