It is slightly outdated slang. It combines all of these meanings at once: "I understand this idea," "I appreciate this idea," "I like this idea," "I am enthusiastic about this idea." It suggests that the idea is new to you, but it is such a good idea that the instant you hear it, you understand it completely and you like it.

I'm reminded of this play on words from The Young Ones series: "Do you dig graves?" http://www.youtube.com/watch?v=_fb33PrnxtA

I'm just here to support what Dan and Ben said. Nobody has used 'dig' in this sense for around 50 years. The dictionary definitions which Amir has given you are fine and useful - but only if you're writing a play set in the mid 1960s! Anyone who tried to use these phrases nowadays would sound ridiculous.

Dan is right. Don't use it. Even people who used it in the 1960s (50 years ago) have stopped using it a long time ago for fear of sounding like a talking antique. By the way, the way to ask your question is, "What does that mean?" "How to get this phrase?" is wrong.

dig in this sentence means like or understand . Not usually used though and its very informal. Use to be very common many years ago , esp the hippies era . u can use it off course i dig it / Hey man , im digging this / do u dig ?