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a diesel engine is a type of
internal combustion engine. Combustion is another
word for burning, and internal means inside, so an
internal combustion engine is simply one where the
fuel is burned inside the main part of the engine (the
cylinders) where power is produced. That's very
different from an external combustion engine such as
those used by old-fashioned steam locomotives. In a
steam engine , there's a big fire at one end of a boiler
that heats water to make steam. The steam flows
down long tubes to a cylinder at the opposite end of
the boiler where it pushes a piston back and forth to
move the wheels . This is external combustion
because the fire is outside the cylinder (indeed,
typically 6-7 meters or 20-30ft away). In a gasoline
or diesel engine, the fuel burns inside the cylinders
themselves. Internal combustion wastes much less
energy because the heat doesn't have to flow from
where it's produced into the cylinder: everything
happens in the same place. That's why internal
combustion engines are more efficient than external
combustion engines (they produce more energy from
the same volume of fuel).

Generator
An electrical generator is a device that converts
mechanical energy from an external source to electrical
energy. It is important to understand that a generator
does not actually "create" electrical energy, but uses a
prime mover to force the movement of electric charges
in the wire of its windings through a circuit. Thus, the
electric current supplied by the generator is actually the
flow of electric charges.
The generator works using the process of
electromagnetic induction. During electromagnetic
induction, a source moves an electrical conductor, or
wire, in a magnetic field, which induces the flow of
electric charges. The movement of the wire creates a
voltage difference between the two ends of the wire,
causing electric charges to flow and generating current.