The general usage of the term DIG as an indicator of understanding "do you dig" / "dig me" (as in "do you understand") comes from non-English speaking Irish immigrants in the USA speaking Irish to each other.
"An dtuigeann tú?" (pronounced "On digging two") means "Do you understand?".
Also used in a short form "dig it", "dig me" etc.
Used in the 50's by the beatniks, the 60s and 70s saw it enter into the AAVE lexicon, the used of the term was widely popularised in blacksploitation movies such as Shaft, and later movies such as "The Warriors".
Lets not go there, the music sucks and the people are assholes. Way better craic in the old bars, can you dig it?
"You dig it"
"Pretty cool music man, like, look at Stacy... she digs it!"
Literally asking someone if they enjoy something or if they are enjoying something at that moment. Asking another person if they are in favor of something. Asking if they approve.
Cyrus - "You're standing right now with a nine delegates, from a hundred gangs and there's over a hundred more. That's 20,000 hardcore members, 40,000 counting affiliates and 20,000 more not organised but ready to fight. 60,000 soldiers! Now there ain't but 20,000 police in the whole town. Can you dig it?