A business telephone system employs digital signal processing in a digital telephone having a serial link for connection to a general-purpose computer. The Smart Phone is thus the central intelligence for the system, which may utilize a PBX connected in a LAN network to multiple computers, including file servers, and each computer may have one or more Smart Phones connected. In one embodiment, docking bays in the phone provide an ability to interchange functional modules, including DSP modules. The docking bays and functional modules may be configured to PCMCIA standards. In another embodiment, a docking bay, which may also be PCMCIA, has a physical window allowing access to an input area on a docked module, wherein the docked module is an intelligent module with a CPU, memory, and a bus structure, affording control of the smart phone and the entire system through the input interface of the docked module.