After the battle between the Parrotmon and the Greymon near Highten View Terrace while all the DigiDestineds were only todlers, a group overseeing and protecting the Digital World were appointed to create the Digivices along with the Tags and Crests, and take care of 8 DigiEggs that would one day become the DigiDestineds' partner Digimon. These actions would hopefully hult the advance of darkness in the Digital World.
When the Dark Masters became aware of what was going on, they launched an attack, killing all the members of the group, except for Gennai. Gennai escaped with the DigiEggs and Digivices, hiding them on File Island waiting for the darkness, Devimon, to attack.
Once Devimon began his advance, the Digivices were transported to the real world where they carried the children to the Digital World.
A Digivice enables the partner Digimon to Digivolve, through the connection between the human and the Digimon. The added power between the Tag and Crest and the Digivice enable the Digimon to Digivolve to it's Ultimate level. For the time that a Digimon is in its Ultimate or Mega level, the Digivice changes color corresponding to the color of his or her Crest.