In byte stuffing (or character stuffing), a special byte is added to the data section of the frame when there is a character with the same pattern as the flag. The data section is stuffed with an extra byte. This byte is usually called the escape character (ESC), which has a predefined bit pattern. Whenever the receiver encounters the ESC character, it removes it from the data section and treats the next character as data, not a delimiting flag.

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The following data fragment occurs in the middle of a data stream for which the byte-stuffing algorithm described in the text is used: A B ESC C ESC FLAG FLAG D. What is the output after stuffing?

I believe you meant difference between a bit and a byte. A byte is 8 bits.

There are two nibbles in a byte.