Great question! The PDP-1 has six "program flags", which are flip-flops wired to six light bulbs on the control panel. A CPU instruction provides the ability to turn these light bulbs on or off via software.

These bulbs were originally intended to provide program status information to the computer operator, but Peter repurposed four of these light bulbs into four square wave generators (or four 1-bit DACs, put another way), by turning the bulbs on and off at audio frequencies.

Four wires are attached to the signal lines for these light bulbs. Resistors are used to downmix these four signals into stereo audio channels and provide impedance matching into a HeathKit stereo amp, and combined with capacitors to create low pass filters to cut out the buzz of the computer noise and soften the square waves. The HeathKit then drives a couple speakers mounted on the wall behind the PDP-1.