The Digital Camera is found in 2019 NeoTokyo, usable during the NeoTokyo mission. After following the hacker to the base, make your way through to the room with the lockers running along the wall. Turn to face the opposite wall and take a picture of the blueprints. Exit this room. Walk out into the hallway to where you can see the TimeSplitter through the window and take the second picture. It is something you can not use in Arcade Custom, but it is only found and used in this mission. The Digital Camera is also used in this mission for getting evidence to clear Ghost's name.
The digital camera, when used, makes a flash appear on the screen and a sound of a camera shutter is triggered. The digital camera can be used an unlimited number of times.