Lecture 3 in UCSD's Digital Integrated Circuit Design class. Here we cover how to build the most basic building block in a digital circuit: the inverter. We start by reviewing the basic CMOS transistor behavior equations, then build a voltage transfer curve and discuss noise margin. We finish by discussing other important transistor non-idealities like subthreshold conduction, the body effect, channel length modulation, velocity saturation and mobility degradation, gate leakage, DIBL, and more.