If your house was built in the last 50 years or so, chances are it's full of non-metallic sheathed cable. That's a good thing. Non-metallic sheathed cable, also called NM cable or Romex, after the popular brand name, is a flexible electrical cable with a plastic outer coating. That's the non-metallic sheath. Inside the sheath are two or more insulated wires and usually a ground wire. That's for safety. NM cable is good for you because it's safer than older types of cable and wiring. It's good for electricians because it's relatively inexpensive and very easy to work with. There are different types of NM cable for different applications.
NM Cable Anatomy
Inside NM cable are three or more wires. If the cable is "two-wire" cable, it has two insulated wires—one black and one white—and one bare copper ground wire. Three-wire cable has a black, white, and red insulated wire plus a bare ground. While the ground isn't counted in the name, it has an important job: it provides a safe path for electricity to follow if something goes wrong with the circuit. Something like a loose wire, a fault in a power tool or appliance, or even a surge in the electrical system. All of the ground wires in a system connect to the home's main service panel (breaker box) and ultimately to the earth, where the errant electricity is dumped.
The cable wires are wrapped in a neat package of thermoplastic sheathing that is nonconductive and heat-resistant. Standard NM cable also has a wrapping of paper inside the sheathing. There are differing beliefs about what the paper does, but a common suggestion is that it keeps the wires from sticking to the sheathing, making it easier to bend the cable.
Standard NM Cable
NM cable for interior work is Type NM-B cable. This is the white, yellow, or orange (and sometimes black) cable you might see running through the framing of an unfinished basement or storage area. Otherwise, it's hidden behind the drywall or other surface material. Type NM-B cable is for dry locations only, so you shouldn't see it or use it outdoors or anywhere it might get wet.
Underground Feeder Cable
Underground feeder, or Type UF-B, cable is a type of NM cable that is suitable for—you guessed it—underground installation. You can bury it right in the dirt. It's moisture-resistant, corrosion-resistant, and fungus-resistant. Yes, fungus-resistant. You need that when you're living sub-grade. UF cable is commonly used to supply electricity to detached garages, sheds, lamp posts, and other outdoor stuff. It typically has gray sheathing but can also be white.
Service Entrance Cable
Those big, black cables that create a high wire for squirrels above your backyard are another type of NM cable. Type SE cable is used for aboveground utility service, while Type USE is used for underground service wires (hopefully, you never see those because it probably means you've been digging in your backyard and didn't follow the rule of Call Before You Dig).