It was a very common way of saying you liked or understood something. Or liked AND understood.
We used to say, in the swinging sixties, "You dig what I mean?" (Do you 'get' my meaning? Do you understand?)
Digging something could also mean that you liked it. "Hey, man! Really dig that shirt!" (I really like it).
Although it was common throughout my early years, I haven't heard anyone use the phrase for a long time.
Is it making a comeback?