Introduction - If you have any usage issues, please Google them yourself
In short, the chain code is a way to represent a binary object by encoding only its boundary. The chain code is composed of a sequence of numbers between 0 and 7. Each number represents the transition between two consecutive boundary pixels, 0 being a step to the right, 1 a step diagonally right/up, 2 a step up, etc. In the post Measuring boundary length, I gave a little more detail about the chain code. Worth repeating here that post is the figure containing the directions associated to each code:
The chain code thus has as many elements as there are boundary pixels. Note that the position of the object is lost, the chain code encodes the shape of the object, not its location. But we only need to remember the coordinates of the first pixel in the chain to solve that. Also note, the chain code encodes a single, solid object. If the object has two disjoint parts, or has a hole, the chain code will not be able to describe the full object.