Disc brakes - unlike drum brakes,use a calliper that grips the disc rotor to the wheel to gain friction. They tend to create more heat than drum brakes, but is designed to continue operating effectively in these conditions - and they are also exposed to outside air which helps with cooling. Within the caliper are usually two brake pads, one for either side of the rotor. These pads clamp together when the brake pedal is pressed. This is a similar concept to that of drum brakes but it is far superior not only in performance but also for reliability.
Problems with Disc Brakes
Many things can happen to disc brakes. But the more common problems are warping (caused by extreme heat), scarring (occurs when pads are not changed when due), and cracking (a bit rare - but occurs due to uneven rotor expansion). The easiest way to repair these problems is by machining the discs. However by doing so, you are effectively reducing the life of your brakes and it might just be cheaper just to replace instead of actually spending money on repairs.