I need more understanding on custom formatting.

In Custom formatting, we have 4 sections divided by a semi colon ;
First section deals with positive values ; second section deals with negative values ; third section deals with 0 ; Fourth section deals with text
Section 1 ; Section 2 ; Section 3; Section 4.
# and 0 both represent numbers but 0 is used for precise display of values whereas # is used to display generally.
If there are 4 0s in custom formatting and the value of cell has 3 digits then excel will show a 0 before the number. But with Hash, it won't do such thing.
# does not display 0s that are not significant to a number but 0 will.