What is the difference between Bitcoin and DigitalCoin? Is there any paper related to DigitalCoin?

DigitalCoin utilizes three separate encryption algorithms while BitCoin only uses sha-256. In essence, it is harder to compromise the DigitalCoin network because breaking just one of the three algorithms doesn't give you full control. Bitcoin is also vulnerable to 51% attack, or anyone with enough power to hash using sha-256 faster than the rest of the network can rollback time, edit blocks, rewrite transactions, etc. With DigitalCoin, you would need control over all three algorithms to even attempt such a feat. The complexity of which would be insanely high even if you did manage to control all three algorithms.

DigitalCoin is just one of the many copycats of Bitcoin, probably made up by people who (mistakenly) think they missed the boat with Bitcoin, and now try to get rich quick by creating their own variant (which really doesn't add anything significant compared to Bitcoin). After easily mining the first DigitalCoins themselves, they hope to see the price rise. I don't see it happening though (as with almost any altcoins).

Judging from the ANNouncement on BitcoinTalk, it is a Scrypt based cryptocurrency deriving from Bitcoin.

It has a limit of 144,500,000 units, a different reward schedule, and aims for confirmations every 40 seconds. They also probably use a different difficulty retargeting algorithm, as they mention faster difficulty adjustment.

Besides that I didn't see any special features distinguishing it from other altcoins.

I was unable to discover a (white) paper dealing specifically with DigitalCoin.