In case of touch tone dialing there is another aspect: classic analog or hybrid (analog call path with computer control) switch has relatively small amount of t

In case of touch tone dialing there is another aspect: classic analog or hybrid (analog call path with computer control) switch has relatively small amount of touch tone decoders (2 for 50 lines and ~10 simultaneous calls being relatively common ratio for PBXes), mechanical pulse dialing-only switches are similarly limited by number of step by step switches. Thus dialtone indicates that: (1) line is reasonably usable, (2) switch has at least theoreticaly resources to connect some call (not necessarily any) and (3) switch actually has resources to decode number you are going to dial. I have seen hybrid PBXes where dial tone is generated by same part of circutiry that decodes DTMF.